Case: Superstore

INTRODUCTION

US Superstore has been very successful with sales increasing rapidly. Management has a desire to begin selling its products globally within the next five years. Revenue is recorded at the time of shipment (FOB shipping point) with company-offered discounts ranging from 0-20 percent, depending upon the products purchased and type of customer.

Regular walk-in customers receive no discounts. However, corporate and home office customers receive the following discounts: chairs: 5 percent; tables: 10 percent; appliances: 20 percent. All discounts have a payment due date of 15 days.

In order to secure a loan, management has requested your services to perform a financial audit for the 2014 year-end to provide the bank and potential investors with confidence in US Superstore's financial position. US Superstore's files from 2011 onward are currently maintained in Excel worksheets. There are three worksheets available: order to cash, returns, and personnel. The company provides customers with three main categories of products: office furniture, office supplies, and technology. Customers are grouped into Consumers, Corporate, and Home Office. The geographical regions are Central,East, West, and South. The sales managers assigned to these regions include: Kelly Williams: Central; Chuck Magee: East; Cassandra Brandow: South; and Anna Andreadi: West. Customer sales data are available for the years 2011 through 2014. Exhibit 1 includes the list of products for US Superstore:

The US Superstore Excel file has 23 columns (as listed in Exhibit 2) and 9,994 transaction lines that provide the data for order to cash information related to US Superstore's revenue. The file has two additional worksheets that include returns and sales staff and their regional responsibilities. Appendix A provides a data hierarchy of US Superstore's database and a summary of basic database terminology. A full list of all US Superstore dataset variables, as shown in Exhibit 2 and demonstrated by the first-row data entry:

CASE ASSIGNMENT

US Superstore has been accepted by your firm as a new audit client. You have been assigned to undertake data analytics for the planning and substantive testing phases for the 2014 audit engagement utilizing Tableau. The engagement partner has requested that you attempt to analyze the entire population rather than using a sample to draw inferences to the population. Therefore, you have decided to present your analyses and findings in tabular or visualization form in order to better understand the data and potential risk areas in auditing the revenue (order to cash) cycle. The case is divided into two parts: Part 1 addresses audit-planning issues with US Superstore; and Part 2 requires detailed data analytics with Tableau, with results presented in tabular and/or visualization form.

Part 2—Substantive Testing of the Revenue (Order to Cash) Cycle

As revenue is considered a high-risk area for most audit engagements (PCAOB 2014), you will utilize Tableau to investigate various aspects of the audit of US Superstore's revenue (order to cash) cycle and related accounts. For the following issues, first, brainstorm develop questions that you need to evaluate with Tableau, and second, prepare the necessary data visualizations or table related to the following issues and questions you developed. Your engagement partner provided the following initial substantive testing issues to your team that need to be evaluated:

1. Are there any indicators that inventory might be overvalued?
2. Superstore records sales on order date. Are there any indications of cut-off issues?
3. Are there any indicators of related-party transactions?
4. Which customers should receive confirmations?
5. Are there any issues or concerns with discounts and cash receipts?  
6. What is the Accounts Receivable 12/31 balance for each year? Are there concerns as to the quality of US Superstore's accounts receivable?
7. What are shipping costs per region or product?  
8. Are there any other issues you think are important? Make dashboard to illustrate your analysis.