The key areas of audit testing are procedures to
·
Check new customer credit procedure are operating
Check new customer credit procedure are operating
·
Check new accounts and credit limits are
properly authorized
Check new accounts and credit limits are
properly authorized
·
Check orders only accepted from customers within
credit limits
Check orders only accepted from customers within
credit limits
·
Check evidence that sales invoices are supported
by:
Check evidence that sales invoices are supported
by:
Ø
Customer orders
Customer orders
Ø
Signed delivery note or evidence of supply of
goods or services
Signed delivery note or evidence of supply of
goods or services
·
Check evidence that invoices are
Check evidence that invoices are
Ø
Checked for arithmetic, prices and calculations,
particularly of VAT
Checked for arithmetic, prices and calculations,
particularly of VAT
Ø
Correctly coded with customer and nominal codes
Correctly coded with customer and nominal codes
Ø
Entered in day books, legers and stock records
Entered in day books, legers and stock records
·
Test numerical sequences and enquire into
missing numbers (including unused or cancelled copies) of
Test numerical sequences and enquire into
missing numbers (including unused or cancelled copies) of
Ø
Invoices
Invoices
Ø
Sales orders
Sales orders
Ø
Delivery notes
Delivery notes
Ø
Goods returned notes
Goods returned notes
·
Check non- routine sales e.g. scrap, sales of
fixed assets
Check non- routine sales e.g. scrap, sales of
fixed assets
Ø
Check authorization for sale
Check authorization for sale
Ø
Check evidence of arrangements for sale
Check evidence of arrangements for sale
Ø
Check assets removed from plant registers
Check assets removed from plant registers
·
Check postings between day books, cash book and
ledgers
Check postings between day books, cash book and
ledgers
·
Ensure receipt from customers posted to correct
account
Ensure receipt from customers posted to correct
account
·
Investigate payment on account or round sum
amounts
Investigate payment on account or round sum
amounts
·
Investigate sums received where no invoice has
been issued
Investigate sums received where no invoice has
been issued
·
Check analysis in sales day books
Check analysis in sales day books
·
Check additions where appropriate
Check additions where appropriate
·
Check entries in stock records for despatches of
goods
Check entries in stock records for despatches of
goods
·
Check cut off procedures at period end
Check cut off procedures at period end
·
Check remittance from customers are credited in
full to the correct account in sales ledger
Check remittance from customers are credited in
full to the correct account in sales ledger
·
Check aged debtor analysis and evidence of
credit control procedures such as follow up of overdue debts
Check aged debtor analysis and evidence of
credit control procedures such as follow up of overdue debts
·
Check aged debtor analysis and evidence of
credit control procedures such as follow up of overdue debts
Check aged debtor analysis and evidence of
credit control procedures such as follow up of overdue debts
·
Check explanations for contra and journal entries
in sales ledgers
Check explanations for contra and journal entries
in sales ledgers
·
Examine records for particularly large or
unusual receipts or transactions.
Examine records for particularly large or
unusual receipts or transactions.
These tests can be used in different combinations and
different ways to audit virtually any kind of sales system. It is the skill of
the author in using combinations of these tests to provide the sufficient
appropriate evidence needed.
different ways to audit virtually any kind of sales system. It is the skill of
the author in using combinations of these tests to provide the sufficient
appropriate evidence needed.