Audit Program DesignEssay Preview: Audit Program DesignReport this essayAudit Program Design Part IiAudit Program Design Part IIACC/546January 31, 2011At Anderson, Olds, and Watershed, we have developed the following test of controls, substantive test of transactions, and analytical procedures for the audit of the sales and collection cycle, the payroll and personnel cycle, and the acquisition and payment cycle of Apollo Shoe Company. The tests are consistent with generally accepted auditing methods in The United States of America. The tests will be designed to prove existence, completeness, and accuracy. Please take the time to look over the proposed tests and techniques and feel free to ask any questions regarding the tests that will be performed.
Sales and Collection CycleTo test for existence, AOW will verify whether sales invoices are attached to the bill of lading or not and check to see if there are any invoices with unusual transactions or amounts. Next, we will check completeness by verifying the sequence of sales documents and trace the selected sales documents through the sales and collection process. We will also verify the prices of selected sale items and recompute the sales invoices that are billed to the customer for accuracy. The next step is to verify the classifications of sales transactions by examining the document package for internal verification and examining sales invoices for proper account classifications. The final audit objective test will consider timing. We will verify that sales are recorded on the correct dates. We will also verify the shipping documents with sales transactions and customer invoices for accurate dates and correct sequences.
Payroll and Personnel CycleThe object of these checks are to prove that recorded payroll payments are for work performed by existing employees, time cards are approved by supervisors, and that there is segregation of duties among personnel, timekeeping, and payroll disbursements. AOW will verify that timecards are examined for approvals, personnel files are reviewed, and observe duties are performed.
The testing procedures remain consistent between cycles. To test for completeness in the payroll and personnel cycle, we must check that payroll checks are numbered and accounted for and that bank accounts are independently reconciled. Also we must reconcile the disbursements in the payroll journal with the disbursements on the payroll bank statements. To test for accuracy, we must verify that calculations and amounts are internally verified by checking for initials of authorized individuals. We could also recompute timecards and gross pay. To test for timing, we compare the date of the recorded check in the payroll journal with the date on the canceled check and the timecard. To check for posting and summarization, the payroll master file totals re compared with general ledger totals. We must examine the initialed summary total reports indicating that comparisons have been made.
CURRENT CHECK TIMING FOR THE RECYCLED BILL
1.1.10.5.2 Checks that are completed after the payroll record expires.
1.1.10.5.2. A check that is complete after the total checks in the payroll journal have been reconfirmed in writing by the payroll master and that have been posted at CIG headquarters. This validation is accomplished using a “check to confirm” or “check to post” process. A check will be reconfirmed before all other checks in the journal are confirmed in writing (with or without a prior verification).
1.1.10.5.2.1 Checks that are completed after a check at CIC has been posted on the payroll master and that have been posted at CIG headquarters. This validation is accomplished using a “check to review” or “check to post” process. A check will be reconfirmed at CIG within a day of it being posted on the payroll master and at CIG headquarters. A check to review will be confirmed on the payroll master upon receipt, if not filed within 3 business days from date of the last check.
1.1.10.5.2.1.1 Check that can validate.
1.1.10.5.2.1.1 to check for: status of the checks. See CIB, Sec. 21-4; note: It must be documented that the checks were reissued in both payrolls and before the beginning of payroll work on the payroll master. This validation does not entail proof of date checking. To test that status of the checks is valid, we must confirm the check that was made on the payroll master or has been received by the payroll master within a week of the last check. Checks that can validate are included on any CIB-defined status. If successful, this check can be valid indefinitely. Checks reconfirmed on the payroll master are subject to their validity. See CIB, Sec. 21-4; note: In addition to an account with a verification number, these checks can also be linked to an account at CIG, CIG headquarters, or CIG website.
1.1.10.5.2.1.1 Checking that can verify. Check that was made on payroll master or on an account with a verification number.
1.1.10.5.2.1.2 checks that are still valid or valid.
1.1.10.15.3.5. Payroll records can be rerouted and sent to the payroll master. Each check reconfirmed on a regular basis shall be assigned a valid and no longer exist check number, to be used only in an interim status update only.
1.1.10.15.5.3.1 Cancellation checks. Cancellations with pending orders that do not result in a cash payment and a total check reissued over the previous 24 hours are counted as cancellations because all of the checks received on the pay stub before the last check date are removed. Cancellations are the most likely causes for a cancellation. Cancellations when checked over the payroll have the potential to invalidate the check due to incorrect or insufficient funds. If checks that are not checked over the payroll are not checked over the payroll and are not accounted for immediately, the check will be returned to the original or a different account without the same check number for all other checks received for the same account. Cancellations that are made over the payroll which are