AR.1

Understanding internal controls over the sales, accounts receivable, and allowance processes.

A. Interview appropriate personnel to understand the

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HR.1.1

sales, accounts receivable, and allowance processes.

B. Document the interview and responses in a narrative

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AR.1.2

and a flowchart.

C. Perform a walkthrough of the process and document

your understanding of the internal controls.

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AR.1.1

Alpine Cupcakes, Inc. Audit Program Audit Year December 31, 20X2 Date WP Ref. AR.1 Understanding internal controls over the sales, accounts receivable, and allowance processes. A. Interview appropriate personnel to understand the 785 On7/2013 He. sales, accounts receivable, and allowance processes. 8. Document the interview and responses in a narrative 7ES 01/17/2023 HR.1.2 and a flowchart. C. Perform a walkthrough of the process and document TES 01/17/8025 HRL. your understanding of the internal controls. R.2.1-22 HR2.2-2.4 AR.2 Test internal control over the accounts receivable and sales processes. A. Select a random sample of recorded sales from the ES 01/23/2013 sales journal to test internal controls over accounts receivable and sales processes. Use attribute sampling to calculate the sample size. B. For each item in the sample, obtain the customer 785 01/23/2013 purchase order, sales order, shipping documents, and copy of the sales invoice. Reperform the client's internal control procedures by comparing the quantity, price, and dates on the customer purchase orders, approved sales orders, shipping documents, and sales invoices. C. Follow up on any exceptions or deviations noted to 785 01/23/2023 determine if they are internal control weaknesses and whether the client has remedied them. D. Use attribute sampling procedures to evaluate the 7ES 01/23/2013 results and conclude whether the internal controls over accounts receivable and sales are operating effectively. WR.2.2-2.4 R21