(Solution) 11-6 (Potential Misstatements And Tests Of Controls) Your Firm Has Been Engaged To Audit The Financial Statements Of The Haven Company. | Snapessays.com


(Solution) 11-6 (Potential misstatements and tests of controls) your firm has been engaged to audit the financial statements of the Haven Company.


11-6 (Potential misstatements and tests of controls) your firm has been engaged to audit the financial statements of the Haven Company. In obtaining an understanding of internal control pertaining to credit sales, the following questionnaire is used:1.Does the company evaluate the customer's credit history, and is amount of available credit checked before a sale is authorized?2.Is there adequate segregation of duties between authorizing sales, shipping goods, and recording sales?3.Does management compare all shipments with recorded sales to ensure that all sales are recorded?4.Is every recorded sale checked against shipping records for appropriateness of revenue recognition?5.Are there adequate controls over the accuracy of the sales invoice?6.Are there adequate controls to ensure that the sales invoices are recorded in the correct time period?7.Are there adequate controls to ensure that the proper customer is billed for shipments?8.Does management review all sales that are recorded on a weekly basis?9.Do adequate controls exist to review company accounting policies regarding revenue recognition?10.Do adequate controls exist to review the consistency of the estimation of the provision for doubtful accounts?RequiredA.Identify a potential misstatement that could occur, assuming a No answer to each question.B.For each question, would you expect the control procedure to be a computer control or a manual control?C.Identify a possible test of controls for the control procedure, assuming a Yes answer to each question. Present your answer in tabular form with separate columns for parts a, b, and c.

 


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This question was answered on: May 23, 2022

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