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AUE3702 ASSIGNMENT 2 SEMESTER 1 2021- ANSWERS
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AUE3702 ASSIGNMENT 2 SEMESTER 1 2021- ANSWERS
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AUE 3702ASSIGNMENT 2 SEMETER 1 2021
UNIQUE NUMBER: 731127
This document is to be used only for comparison
purposes.
Do not distribute, duplicate or submit this document.
, Question 1
Formulate the substantive audit procedures you will perform to audit credit sales for
the year ended 31 January 2021.
General
1. Trace SJ control to general ledger, trail balance and AFS. (Lead schedules)
2. Cast and cross-cast SJ. (Or GL)
3. Obtain a management representation letter.
4. Investigate negative entries in SJ.
Occurrence of sales transactions
1. Select a sample of a sales transaction from the sales journal and select the invoice.
Match the invoice with:
An order received from an approved customer (compare the order to
the approved list of customers to confirm that the order was made by
an approved customer.)
The yellow(picking clip) and blue copy(delivery note) of the invoice
and inspect that the customer signed the delivery note.
2. Trace the invoice to remittance advice and to the cash receipts journal to determine
that the goods were paid for.
3. Examine invoices that are unpaid for 60 days and longer match with orders, signed
delivery notes and correspondence.
4. Review journal entries for unusual reversals after year end for possible fictitious sales.
Cut- off sales transactions
1. At year end physically obtain cancelled document numbers at the end of trading for
documents such as the delivery, invoice and picking slip.
2. After year end agree the cancelled number to the sales journal to the end of day
transaction.
3. Perform sequence tests of transactions before and after the cancelled documents date
(year end) that the transactions are recorded in the correct period sequence.
4. Select a sample of invoices from the sales journal before and after year end and trace
the picking and delivery notes to establish that they are recorded in the correct period.
Accuracy and classification of sales transactions
1. Select a sample of invoices and:
Perform recalculations of extensions, casts, discounts and VAT.
Confirm prices and discounts to valid price lists.
Confirm that the invoice meets the criteria of a valid tax invoice.
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