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1、13-1Audit of the Sales andCollection CycleChapter 1313-2Revenue and Collection CyclenReceiving and processing orders(granting credit)nDelivering goods and services to customersnBilling and recording of accounts receivablenCollecting and depositing customer paymentsnBank reconciliation13-3Accounts in
2、clude:nAccounts ReceivablenSalesnCash-cash receiptsnAllowance for Doubtful AccountsnBad DebtsnSales returns and allowancesnSales Discounts13-4Accounts in the Salesand Collection CycleSalesCashsalesSales onaccountCash in BankCash DiscountsTakenSales Returnsand AllowancesBad DebtExpenseAccounts Receiv
3、ableBeginningCash receiptsbalanceSales returnsSales on and allowancesaccountCharge-off ofEnding uncollectiblebalance accounts13-5Accounts in the Salesand Collection CycleAccounts ReceivableBeginningCash receiptsbalanceSales returnsSales on and allowancesaccountCharge-off ofEnding uncollectiblebalanc
4、e accountsBad DebtExpense Allowance for Uncollectible AccountsCharge-off ofBeginninguncollectiblebalanceaccountsEstimate of baddebt expenseEnding balance13-6Segregation of DutiesnSales and credit authorizationnCustody of goods and cashnRecord keeping for sales,receivables and inventorynBank reconcil
5、iation13-7Control ActivitiesnFidelity bond on persons handling cashnNo sales entered without a customer ordernCredit authorizationnRestricted access to:nInventory/cashnBilling terminalsnBlank invoicesnSales recorded as of shipping datenCash receipts on date received13-8Control ActivitiesnCustomer in
6、voice checked for:nProper pricenQuantity shipped=billednPending order file reviewed completenessnBank reconciliation monthly nSales returns and adjustments authorization and processingnBad debt write-offs authorization13-9Special Audit ConsiderationsnReceivable are required to be confirmed by GAASnA
7、uditor can chose not to confirm receivables if:nReceivables are immaterialnConfirmations are unreliablenConfirmations help prove existence nExistence risk of overstating of revenues13-10ConfirmationsnPositive and Blank ConfirmationsnUsed for large individual balancesnBetter evidencenMust get all res
8、ponsesnNegative ConfirmationsnUsed for large numbers of small balancesnAnd when IR and CR are lownResponse rates13-11Bank ReconciliationnCutoff bank statement confirms reconciling itemsnLapping of customer accounts-nSegregation of dutiesnTrace daily remittance to customer posting nCheck Kiting contr
9、ols-interbank transfer schedule13-12Processing Customer Orders Customer Order:A request for merchandiseby a customerSales Order:A document describing thegoods ordered by a customer13-13Granting Credit13-14Sales TransactionAccountsBusinessFunctionsDocumentsand RecordsSalesAccounts receivableProcessin
10、g customer orders,Granting credit,Shipping goods,Billing customers and recording salesSales invoice,Sales journal or listing,Salestransaction file,Accounts receivable masterfile and trial balance,Monthly statements13-15Cash Receipts TransactionAccountsBusinessFunctionsDocumentsand RecordsCash in ban
11、k(debits from cash receipts)Accounts receivableProcessing and recording cash receiptsRemittance advise,Prelisting of cash receipts,Cash receipts transaction file,Cash receipts journal or listing13-16Sales Returns and Allowances TransactionAccountsBusinessFunctionsDocumentsand RecordsSales returns an
12、d allowancesAccounts receivableProcessing and recordingsales returns and allowancesCredit memoSales returns and allowances journal13-17Charge-off of Uncollectible Accounts TransactionAccountsBusinessFunctionsDocumentsand RecordsAccounts receivableAllowance for uncollectible accountsCharging off unco
13、llectibleaccounts receivableUncollectible account authorization formGeneral journal13-18Bad Debt ExpenseTransactionAccountsBusinessFunctionsDocumentsand RecordsBad debt expenseAllowance for uncollectible accountsProviding for bad debtsGeneral journal13-19Shipping GoodsShippingdocument13-20Billing Cu
14、stomersand Recording SalesSales invoiceSales transaction fileSales journal or listingAccounts receivable master fileAccounts receivable trial balanceMonthly statement13-21Processing and RecordingCash ReceiptsRemittance advisePrelisting of cash receiptsCash receipts transaction fileCash receipts jour
15、nal or listing13-22Lockbox Systems and Electronic Funds TransferCustomerBankOrder/PaymentInformationCompany13-23Processing and Recording Sales Returns and Allowances13-24Charging Off UncollectibleAccounts Receivable13-25Providing for Bad Debts13-26Effect of E-Commerce on the Sales and Collection Cyc
16、leThe Internet13-27Effect of E-Commerce on the Sales and Collection Cycle13-28Effect of E-Commerce on the Sales and Collection Cycle13-29Methodology for Designing Controlsand Substantive Tests:SalesUnderstand internalcontrol salesAssess plannedcontrol risk salesEvaluate cost-benefitof testing contro
17、ls.Design tests of controlsand substantive testsof transactions for salesto meet transaction-related audit objectives.Audit proceduresSample sizeItems to selectTiming13-30Understanding InternalControl SalesStudy the clients flowcharts,prepare an internal controlquestionnaire,and performwalk-through
18、tests of sales.13-31Assess PlannedControl Risk SalesAdequate separationof dutiesProper authorizationAdequate documentsand recordsPrenumbereddocuments Monthly statements Internal verification procedures13-32Internal Verification Procedures13-33Transaction-Related AuditObjectives for SalesExistence:Re
19、corded sales are for shipments actually made.Accuracy:Recorded sales are for the amount shipped.Completeness:Existing sales transactions are recorded.13-34Design Substantive Testsof Transactions for SalesClassification:Sales transactions are properly classified.Timing:Sales are recorded on the corre
20、ct dates.Posting and summarization:Sales transactions are properly includedin the accounts receivable master file.13-35Direction of Tests for SalesCustomerorderShippingdocumentDuplicatesales invoiceSalesjournalGeneralledgerAccountsreceivablemaster file=Completeness StartExistence Start13-36Summary o
21、f Methodologyfor Sales13-37Sales Returnsand Allowances13-38Sales Returnsand AllowancesThere are,however,two important differences.MaterialityEmphasis onobjectives13-39Tests of Controls and Substantive Testsof Transactions for Cash Receiptsv Determine whether cash received was recordedv Prepare proof
22、 of cash receiptsv Test to discover lapping of accounts receivable13-40Audit Tests forUncollectible AccountsExistence of recorded write-offs is the mostimportant transaction-related audit objective.What is a major concern in testing accountscharged off as uncollectible?covering up a defalcation by c
23、harging offaccounts receivable that have been collected13-41Additional Internal ControlsOver Account BalancesRealizable valueRights and obligationsPresentation and disclosure13-42Effect of Results of Controls andSubstantive Tests of TransactionsThe parts of the audit most affected by thetests for th
24、e sales and collection cycle are:AccountsreceivableCashBad debtexpenseAllowance fordoubtful accounts13-43Role of all Audit Tests in the Sales and Collection CycleSalesAccountsReceivableCash inBankSalestransactionsCash receiptstransactionsEndingbalanceEndingbalanceTOC+STOT+AP+TDP=Sufficient competent evidence per GAASAudited byTOC,STOT,and APAudited by AP and TDPAudited byTOC,STOT,and AP13-44End of Chapter 1313-45演讲完毕，谢谢观看！