1 2020-21 >> ACT 450-1 (Lec) >> Auditing 1 Quiz naviga Apple Sauce Electronics Limited is a designer of high technology healthcare equipment. For the current financial year the CFO of Apple Sauce Electronics Limited reported the following key account balances: (a) Sales Revenue - $111 million; (b) Gross Profit - $65 million; (C) EBIT - $43 million; (d) NOPAT - $5 million; (e) Total Current Assets - $8 million; ( Total Net PPE - $60 million; (g) Total Assets - $250 million; (h) Total Current Liabilities - $15 million; Total Interest-Bearing Debt - $185 million; and (Total Equity $15 million. 2 ut of 6 7 Hazy Auditing Services has been the auditor of Apple Sauce Electronics Limited for the past 4 years and were recently reappointed to audit the financial statements for the current financial year. Finish attem Required: Consider the following scenarios independently. Determine the type of evidence procedure that best describes the action being adopted by the audit team in each scenario. Format B. Evidence Type Justification Scenario Apple Sauce Electronics Limited recorded a number of sales transactions during the last financial year. An audit team member was required to select a random sample of the sales transactions. Another audit team member was then required to add the value of the sales of the selected sample. This resulting number was checked by the audit team leader. 1 The audit team leader wished to get an understanding of the process Jand procedures for approving credit sales and credit limits to customers. The audit team leader wished to review the standard operating manuals, credit policies and digital files created by Apple Sauce Electronics Limited in relation to this issue. The audit team wished to check the accuracy of the accounting information system of Apple Sauce Electronics Limited. The audit team Jcreated a series of dummy sales and expense transactions for which Jaggregate values were calculated. The dummy transactions were Jentered into the accounting information system of Apple Sauce JElectronics Limited and the resulting totals calculated again and compared to the original. Scenario Evidence Apple Sauce Electronics Limited recorded a number of sales transactions during the last financial year. An audit team member was required to select a random sample of the sales transactions. Another audit team member was then required to add the value of the sales of the selected sample. This resulting number was checked by the audit team leader. The audit team leader wished to get an understanding of the process and procedures for approving credit sales and credit limits to customers. The audit team leader wished to review the standard operating manuals, credit policies and digital files created by Apple Sauce Electronics Limited in relation to this issue. The audit tea wished to check the accuracy the accounting information system of Apple Sauce Electronics Limited. The audit team created a series of dummy sales and expense transactions for which aggregate values were calculated. The dummy transactions were lentered into the accounting information system of Apple Sauce Electronics Limited and the resulting totals calculated again and compared to the original