The audit procedures listed below are included in the audit program because of heightened risks of material misstatements due to fraud Read the requirements LOADING Requirement a For each audit procedure select the description of the type of fraud risk that is likely associated with the need for this audit procedure LOADING (Click the icon to view the descriptions ) Audit procedures Likely type of fraud 1 Use audit software to search purchase transactions to identify any with nonstandard vendor numbers or with vendor names reflecting related parties 2 Search sales databases for missing bill of lading numbers 3 Use audit software to search for journal entries posted to the sales revenue account from a nonstandard source (other than the daily sales journal) 4 Use audit software to search cash disbursement master files for missing check numbers 5 Search the accounts receivable master file for account balances with missing or unusual customer numbers (e g , 99999 ) 6 Use audit software to create a list of all credits to the repair and maintenance expense account for follow up testing 7 Engage an actuarial specialist to examine management's assumptions about average length of employment and average life expectancy of retirees used in pension accounting decisions 8 Send confirmations to customers for large sales transactions made in the fourth quarter of the year to obtain customer responses about terms related to the transfer of title and ability to return merchandise Requirement b Identify the related accounts likely affected by the potential fraud misstatement (Abbreviations used AP Accounts payable AR Accounts receivable CGS Cost of goods sold FA Fixed assets ) Likely accounts affected by potential fraud misstatement 1 Use audit software to search purchase transactions to identify any with nonstandard vendor numbers or with vendor names reflecting related parties 2 Search sales databases for missing bill of lading numbers 3 Use audit software to search for journal entries posted to the sales revenue account from a nonstandard source (other than the daily sales journal) 4 Use audit software to search cash disbursement master files for missing check numbers 5 Search the accounts receivable master file for account balances with missing or unusual customer numbers (e g , 99999 ) 6 Use audit software to create a list of all credits to the repair and maintenance expense account for follow up testing 7 Engage an actuarial specialist to examine management's assumptions about average length of employment and average life expectancy of retirees used in pension accounting decisions 8 Send confirmations to customers for large sales transactions made in the fourth quarter of the year to obtain customer responses about terms related to the transfer of title and ability to return merchandise Requirement c Identify the related audit objective(s) that this procedure addresses Related audit objective that this procedure addresses 1 Use audit software to search purchase transactions to identify any with nonstandard vendor numbers or with vendor names reflecting related parties 2 Search sales databases for missing bill of lading numbers 3 Use audit software to search for journal entries posted to the sales revenue account from a nonstandard source (other than the daily sales journal) 4 Use audit software to search cash disbursement master files for missing check numbers 5 Search the accounts receivable master file for account balances with missing or unusual customer numbers (e g , 99999 ) 6 Use audit software to create a list of all credits to the repair and maintenance expense account for follow up testing 7 Engage an actuarial specialist to examine management's assumptions about average length of employment and average life expectancy of retirees used in pension accounting decisions 8 Send confirmations to customers for large sales transactions made in the fourth quarter of the year to obtain customer responses about terms related to the transfer of title and ability to return merchandise

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The audit procedures listed below are included in the audit program because of heightened risks of material misstatements due to fraud. Read the requirements LOADING...

The audit procedures listed below are included in the audit program because of heightened risks of material misstatements due to fraud.

Read the requirements

Requirement a. For each audit procedure select the description of the type of fraud risk that is likely associated with the need for this audit procedure.

(Click the icon to view the descriptions.)

	Audit procedures	Likely type of fraud
1.	Use audit software to search purchase transactions to identify any with nonstandard vendor numbers or with vendor names reflecting related parties.
2.	Search sales databases for missing bill of lading numbers.
3.	Use audit software to search for journal entries posted to the sales revenue account from a nonstandard source (other than the daily sales journal).
4.	Use audit software to search cash disbursement master files for missing check numbers.
5.	Search the accounts receivable master file for account balances with missing or unusual customer numbers (e.g., "99999").
6.	Use audit software to create a list of all credits to the repair and maintenance expense account for follow-up testing.
7.	Engage an actuarial specialist to examine management's assumptions about average length of employment and average life expectancy of retirees used in pension accounting decisions.
8.	Send confirmations to customers for large sales transactions made in the fourth quarter of the year to obtain customer responses about terms related to the transfer of title and ability to return merchandise.

Requirement b. Identify the related accounts likely affected by the potential fraud misstatement. (Abbreviations used: AP = Accounts payable; AR = Accounts receivable; CGS = Cost of goods sold; FA = Fixed assets.)

		Likely accounts affected by potential fraud misstatement
1.	Use audit software to search purchase transactions to identify any with nonstandard vendor numbers or with vendor names reflecting related parties.
2.	Search sales databases for missing bill of lading numbers.
3.	Use audit software to search for journal entries posted to the sales revenue account from a nonstandard source (other than the daily sales journal).
4.	Use audit software to search cash disbursement master files for missing check numbers.
5.	Search the accounts receivable master file for account balances with missing or unusual customer numbers (e.g., "99999").
6.	Use audit software to create a list of all credits to the repair and maintenance expense account for follow-up testing.
7.	Engage an actuarial specialist to examine management's assumptions about average length of employment and average life expectancy of retirees used in pension accounting decisions.
8.	Send confirmations to customers for large sales transactions made in the fourth quarter of the year to obtain customer responses about terms related to the transfer of title and ability to return merchandise.

Requirement c. Identify the related audit objective(s) that this procedure addresses.

		Related audit objective that this procedure addresses
1.	Use audit software to search purchase transactions to identify any with nonstandard vendor numbers or with vendor names reflecting related parties.
2.	Search sales databases for missing bill of lading numbers.
3.	Use audit software to search for journal entries posted to the sales revenue account from a nonstandard source (other than the daily sales journal).
4.	Use audit software to search cash disbursement master files for missing check numbers.
5.	Search the accounts receivable master file for account balances with missing or unusual customer numbers (e.g., "99999").
6.	Use audit software to create a list of all credits to the repair and maintenance expense account for follow-up testing.
7.	Engage an actuarial specialist to examine management's assumptions about average length of employment and average life expectancy of retirees used in pension accounting decisions.
8.	Send confirmations to customers for large sales transactions made in the fourth quarter of the year to obtain customer responses about terms related to the transfer of title and ability to return merchandise.