14.7 Oceanview Marine Company Nonstatistical Attributes Sampling Data Sheet: Acquisitions December 31, 2018 Define the objective: Evaluation of internal controls and the accounting system for acquisitions. Define the population precisely: Purchase transactions that occurred between Jan. 1. 2018 and Dec 31. 2018, inclusive Define the sampling unit, organization of population items, and random selection procedures: Purchase transactions as identified by voucher numbers recorded sequentially in voucher register. Computer-generated random sample. Planning Actual Results Description of Attributes Sample Sample Sample Eroti Sampling Kated EPER TER ARO Number of CUER Sie SD 196 796 10% 55 40% 1 Document package includes all documents appropriate for the transaction. (E) 2. Proper approval of purchase order. (E) 296 10% 4.0% 3. Goods have been received. (E) 196 7% 1096 4.096 4. 796 10 4.09 Amount in voucher register agrees with amount on vendor's invoice (1) 1946 896 10% 4,096 3. Quantities on vendor's invoice agree with related receiving report and P.O. and invoice is mathematically correct. (A) 6 196 896 4.ON 10% All documents in voucher package have been stamped "pald" (E) 1% 896 10 40 7. Proper accounts were debited and credited. (CD) 296 896 10% & Acquisitions recorded promptly after receipt of goods (1) Audit Objective for Tests of Controls and Substantive Tests of Transactions: Accuracy Existence Classification Posting & summarization Completeness Timing Decide sample size d. On workpaper 14-7, complete the sample size column under Planning. TIP: Workpaper 14-7 includes descriptions of eight attributes. Testing the eight attributes will satisfy the requirements of steps 1(a) through 1(h) on workpaper 14-3. Determine the sample size for attributes through 8 using the attribute sampling table in your auditing textbook or the first table provided in the appendix to this assignment. To provide a reference, the sample size for the first attribute has already been entered on workpaper 14-7. You may also use workpaper 12-6 as a guide for completing workpaper 14-7. Keep in mind, however, that workpaper 12-6 uses a statistical approach whereas workpaper 14-7 uses a nonstatistical approach. As a result, the "actual results" sections of these two workpapers differ. Select the sample items e. Now, ignoring your answer in step (d) above, assume that the sample size for all eight attributes is 55 items. Complete the sample size column in the Actual Results section on workpaper 14-7 using 55 as the sample size. Bill has randomly selected 55 purchase voucher packages for testing (see workpaper 14- 5). Assume Bill Cullen has performed tests on 50 of the 55 voucher packages and found no exceptions. In step (6) below, you will perform tests of controls and substantive tests of transactions on the remaining five vouchers. Perform the tests f. For each of the five vouchers indicated on workpaper 14-8, perform tests of controls and substantive tests of transactions for attributes 1 through 8 listed on workpaper 14-7 using the client documents provided in the Client Documents folder. For each voucher tested, enter an "X" in the appropriate column on workpaper 14-8 to indicate an exception. If a document typically used for the type of transaction you are testing is missing, this will result in an exception for each attribute that requires examination of that document 143 Oceanview Marine Company Audit Program (performance format) Tests of Controls and Substantive Tests of Transactions: Acquisitions December 31, 2018 k22/23/2009 AUDIT PROCEDURES - W/P INIT COMMENTS 14-5 E 14-7 Atribute #2 on W/P 14-7 Attribute #3 on W/P 14-7 KL KL Attribute to W/P 14-7 kt Attribute #5 on W/P 14-7 KL Attributes on W/P 14-7 E 74-7 CI 1. Select a sample of 55_voucher register (purchases journal) entries and for each entry: a review the purchase order for appropriate approval. 6 vouch to the receiving report or other supporting document to ensure goods or services were received. c. compare amount recorded in voucher register with total on vendor's invoice d.) verify the mathematical accuracy of information on the vendor's invoice c. compare quantity(ies) on invoice with quantity(ies) on receiving report and purchase order. determine that all documents in voucher package are canceled (stamped "paid) to prevent re-use. g.) review supporting documents to verify proper account classification h. compare the dates actually recorded with dates on supporting receiving reports. 2. Select a sample of_55_receiving reports and: a. trace cach to the voucher register (purchases journal). b. trace posting from voucher register to A/P subsidiary records 3. Determine by inspection that receiving reports are prenumbered, and are accounted for 4. Test the accuracy of the footings in the voucher register, and trace postings of totals to the general ledger 5. Determine by inspection that an independent reconciliation of the A/P subsidiary records and the GL is performed regularly VL Attribute 6 on W/P 14-7 14-7 VL Attribute #7 on W/P 14-7 HL Attribute 28 on W/P 14-7 T 14-7 BC P 14-10 14-10 BC No exceptions found No exceptions found 14.9 BC No exceptions found P 14.9 BC No exceptiores found P 14.9 BC No exceptions found * Audit Objective for Tests of Controls and Substantive Tests of Transactions: Accuracy Existence or occurrence Classification Posting & summarization Completeness Timing 14.7 Oceanview Marine Company Nonstatistical Attributes Sampling Data Sheet: Acquisitions December 31, 2018 Define the objective: Evaluation of internal controls and the accounting system for acquisitions. Define the population precisely: Purchase transactions that occurred between Jan. 1. 2018 and Dec 31. 2018, inclusive Define the sampling unit, organization of population items, and random selection procedures: Purchase transactions as identified by voucher numbers recorded sequentially in voucher register. Computer-generated random sample. Planning Actual Results Description of Attributes Sample Sample Sample Eroti Sampling Kated EPER TER ARO Number of CUER Sie SD 196 796 10% 55 40% 1 Document package includes all documents appropriate for the transaction. (E) 2. Proper approval of purchase order. (E) 296 10% 4.0% 3. Goods have been received. (E) 196 7% 1096 4.096 4. 796 10 4.09 Amount in voucher register agrees with amount on vendor's invoice (1) 1946 896 10% 4,096 3. Quantities on vendor's invoice agree with related receiving report and P.O. and invoice is mathematically correct. (A) 6 196 896 4.ON 10% All documents in voucher package have been stamped "pald" (E) 1% 896 10 40 7. Proper accounts were debited and credited. (CD) 296 896 10% & Acquisitions recorded promptly after receipt of goods (1) Audit Objective for Tests of Controls and Substantive Tests of Transactions: Accuracy Existence Classification Posting & summarization Completeness Timing Decide sample size d. On workpaper 14-7, complete the sample size column under Planning. TIP: Workpaper 14-7 includes descriptions of eight attributes. Testing the eight attributes will satisfy the requirements of steps 1(a) through 1(h) on workpaper 14-3. Determine the sample size for attributes through 8 using the attribute sampling table in your auditing textbook or the first table provided in the appendix to this assignment. To provide a reference, the sample size for the first attribute has already been entered on workpaper 14-7. You may also use workpaper 12-6 as a guide for completing workpaper 14-7. Keep in mind, however, that workpaper 12-6 uses a statistical approach whereas workpaper 14-7 uses a nonstatistical approach. As a result, the "actual results" sections of these two workpapers differ. Select the sample items e. Now, ignoring your answer in step (d) above, assume that the sample size for all eight attributes is 55 items. Complete the sample size column in the Actual Results section on workpaper 14-7 using 55 as the sample size. Bill has randomly selected 55 purchase voucher packages for testing (see workpaper 14- 5). Assume Bill Cullen has performed tests on 50 of the 55 voucher packages and found no exceptions. In step (6) below, you will perform tests of controls and substantive tests of transactions on the remaining five vouchers. Perform the tests f. For each of the five vouchers indicated on workpaper 14-8, perform tests of controls and substantive tests of transactions for attributes 1 through 8 listed on workpaper 14-7 using the client documents provided in the Client Documents folder. For each voucher tested, enter an "X" in the appropriate column on workpaper 14-8 to indicate an exception. If a document typically used for the type of transaction you are testing is missing, this will result in an exception for each attribute that requires examination of that document 143 Oceanview Marine Company Audit Program (performance format) Tests of Controls and Substantive Tests of Transactions: Acquisitions December 31, 2018 k22/23/2009 AUDIT PROCEDURES - W/P INIT COMMENTS 14-5 E 14-7 Atribute #2 on W/P 14-7 Attribute #3 on W/P 14-7 KL KL Attribute to W/P 14-7 kt Attribute #5 on W/P 14-7 KL Attributes on W/P 14-7 E 74-7 CI 1. Select a sample of 55_voucher register (purchases journal) entries and for each entry: a review the purchase order for appropriate approval. 6 vouch to the receiving report or other supporting document to ensure goods or services were received. c. compare amount recorded in voucher register with total on vendor's invoice d.) verify the mathematical accuracy of information on the vendor's invoice c. compare quantity(ies) on invoice with quantity(ies) on receiving report and purchase order. determine that all documents in voucher package are canceled (stamped "paid) to prevent re-use. g.) review supporting documents to verify proper account classification h. compare the dates actually recorded with dates on supporting receiving reports. 2. Select a sample of_55_receiving reports and: a. trace cach to the voucher register (purchases journal). b. trace posting from voucher register to A/P subsidiary records 3. Determine by inspection that receiving reports are prenumbered, and are accounted for 4. Test the accuracy of the footings in the voucher register, and trace postings of totals to the general ledger 5. Determine by inspection that an independent reconciliation of the A/P subsidiary records and the GL is performed regularly VL Attribute 6 on W/P 14-7 14-7 VL Attribute #7 on W/P 14-7 HL Attribute 28 on W/P 14-7 T 14-7 BC P 14-10 14-10 BC No exceptions found No exceptions found 14.9 BC No exceptions found P 14.9 BC No exceptiores found P 14.9 BC No exceptions found * Audit Objective for Tests of Controls and Substantive Tests of Transactions: Accuracy Existence or occurrence Classification Posting & summarization Completeness Timing