1. Costs and Benefits of Control Case

The Ocean View Cafeteria formerly collected from each customer as they reached the end of the food line. A cashier, seated at a cash register, rang up the amount (displayed on a digital screen) and collected money.

Management changed the system, and now a clerk at the end of the line operates a calculator/printer machine and gives each customer a paper tape. The machine accumulates a running total internally. The customer presents the tape at the cash register on the way out and pays.

The cafeteria manager justified the direct cost of $30,000 annually for the additional salary and $500 for the new machine by pointing out that she could serve four more people each weekday (Monday through Friday) and ten more people on Saturday and Sunday.

The food line now moves faster, and customers are more satisfied. (The average meal tab is $12, and the total costs of food and service are considered fixed.) Besides, she said, my internal control is better.

Evaluate the managers assertions (requires both quantitative and qualitative analysis).

2. Testing for Fraud Case

Clear Vision Inc. is a very modern company that strives to be paperless in all its administrative functions. Clear Vision has arranged with its bank to receive all its banking transaction information online, through the banks online banking website.

Clear Visions auditor wants to get a cutoff bank statement as of January 20, 20X2, to complete the audit of the bank reconciliation.

Required:

a. Explain what a cutoff bank statement is and explain its purpose in auditing the bank reconciliation.

b. Why would an auditor request a cut off bank statement?

c. Describe one way that Clear Visions auditor can obtain a cutoff bank statement if the bank cannot provide a paper copy.

3. Omitting to Record Sales Case

The auditor is considering confirming zero-balance accounts from the auditees accounts receivable subledger to provide evidence concerning the completeness assertion for accounts receivables and sales.

Required:

a. What are the advantages and limitations of this procedure?

b. How would the decision to use this procedure relate to the auditors control assessment? Discuss the kinds of controls the auditee would be expected to have and the procedures the auditor could use to test them.

This is the Canadian Auditing. Thanks so much for helping me!!!