Question 2 Test of Controls for Sales and Accounts Receivable (Total 18 marks)

Set out below is a list of the contents of NZ Tidy Ltd.s accounts receivable computer master file: 1 Customer number 2 Customer name 3 Customer address 4 Salesperson code 5 Standard trade discount (%) 6 Credit limit 7 Date of last purchase 8 Date of last payment 9 Balance due 10 Ageing of balance due: 30 days 60 days 90 days or more

Required:

(a) List four audit tests that could be undertaken using generalised audit software to produce reports that would be helpful in the audit of accounts receivable. Briefly describe how these tests will benefit the auditor. (4 marks) (b) Explain what is meant by test data, how it may be used to assist in the audit of accounts receivable and any limitations in its use. (5 marks)