EXHIBIT 7.60.1 a. b. C. d. Sales recorded, goods not shipped Goods shipped, sales not recorded Goods shipped to a bad credit risk customer Sales billed at the wrong price or wrong quantity Product line A sales recorded as Product line B Failure to post charges to customers for sales g. January sales recorded in December CONTROL PROCEDURES 1. Sales order approved for credit 2. Prenumbered shipping doc prepared. sequence checked 3. Shipping document quantity compared to sales invoice . Prenumbered sales invoices, sequence checked 5. Sales invoice checked to sales order 6. Invoiced prices compared to approved price list 7. General ledger code checked for sales product lines 8. Sales dollar batch totals compared to sales journal 9. Periodic sales total compared to same period accounts receivable postings Accountants have instructions to date sales on the date of 10. 1 Sales entry date compared to shipping doc date 2. Accounts receivable subsidiary totaled and reconciled to 3. Intercompany accounts reconciled with subsidiary 14. Credit files updated for customer payment hist accounts receivable control account company records 5. Overdue customer accounts investigated for collection LO 7-3 7.62 Client Control Procedures and Audit Tests of Controls. Exhibit 7.60.1 contains an arrangement of examples of transaction errors (lettered a-g) and a set of client control pro- cedures and devices (numbered 1-15). Required: For each client control procedure numbered 1-15, write a test of controls that could produce evidence on the question of whether the client's control procedure has been implemented and is in operation. EXHIBIT 7.60.1 a. b. C. d. Sales recorded, goods not shipped Goods shipped, sales not recorded Goods shipped to a bad credit risk customer Sales billed at the wrong price or wrong quantity Product line A sales recorded as Product line B Failure to post charges to customers for sales g. January sales recorded in December CONTROL PROCEDURES 1. Sales order approved for credit 2. Prenumbered shipping doc prepared. sequence checked 3. Shipping document quantity compared to sales invoice . Prenumbered sales invoices, sequence checked 5. Sales invoice checked to sales order 6. Invoiced prices compared to approved price list 7. General ledger code checked for sales product lines 8. Sales dollar batch totals compared to sales journal 9. Periodic sales total compared to same period accounts receivable postings Accountants have instructions to date sales on the date of 10. 1 Sales entry date compared to shipping doc date 2. Accounts receivable subsidiary totaled and reconciled to 3. Intercompany accounts reconciled with subsidiary 14. Credit files updated for customer payment hist accounts receivable control account company records 5. Overdue customer accounts investigated for collection LO 7-3 7.62 Client Control Procedures and Audit Tests of Controls. Exhibit 7.60.1 contains an arrangement of examples of transaction errors (lettered a-g) and a set of client control pro- cedures and devices (numbered 1-15). Required: For each client control procedure numbered 1-15, write a test of controls that could produce evidence on the question of whether the client's control procedure has been implemented and is in operation
