Niosoki Auto Parts sells new parts for foreign automobiles to auto dealers. Company policy requires that a prenumbered shipping documents be issued for each sale. At the time of pickup or shipment, the shipping clerk writes the date on the shipments documents. The last shipment made in the fiscal year ended August 31, 2013, was recorded on documents 2167. Shipments are billed in order that the billing clerk receives the shipping documents. For late August and early September, shipping documents are billed on sales invoices as follow

Shipping document no Sales invoices no

2163 5437

2164 5431

2165 5432

2166 5435

2167 5436

2168 5433

2169 5434

2170 5438

2171 5440

2172 5439

The august and September sales journals have the following information included

Sales Journal- August 2013

Day month Sales invoiced No Amount of sale

30 5431 $726.11

30 5434 4,214.30

31 5432 419.83

31 5433 1,620.22

31 5435 47.74

Sales journal _ September

Day month Sale invoice no Amonut of sale

1 5431 $2,541.31

1 5436 106.39

1 5438 852.06

2 5440 1,250.50

2 5439 546.58

A. What are the accounting requirements for correct cutoff

b. Which sales invoices if any, are recorded in the wrong accounting period? Do an adjusting entry to correct the financial statements for the year ended August 31, 2013. Assume that the company uses a periodic inventory system.

c. Assume that the shipping clerk accidentally wrote August 31 on shipping documents 2168 through 2172. Explain how that will effect the correctness of the financial statements. How will you, as an auditor, discover the error.

d. Describe, in general terms, the audit procedures you would follow in making sure that cutoff for sales is accurate at balance sheet date.

e, Identify internal controls that will reduce the like hood of cutoff misstatements how would you test each control