The following are commonly performed tests of controls and substantive tests of transactions audit procedures in the sales and collection cycle:

1. Account for a sequence of shipping documents and examine each one to make sure that a duplicate sales invoice is attached.

• 2. Account for a sequence of sales invoices and examine each one to make sure that a duplicate copy of the shipping document is attached.
• 3. Compare the quantity and description of items on shipping documents with the related duplicate sales invoices.
• 4. Trace recorded sales in the sales journal to the related accounts receivable master file and compare the customer name, date, and amount for each one.
• 5. Examine sales returns for approval by an authorized official.
• 6. Review the prelisting of cash receipts to determine whether cash is prelisted daily.
• 7. Reconcile the recorded cash receipts on the prelisting with the cash receipts journal and the bank statement for a 1-month period.

Required

• a. Identify whether each audit procedure is a test of control or a substantive test of transactions.
• b. State which of the six transaction-related audit objectives each of the audit procedures fulfills.
• c. Identify the type of evidence used for each audit procedure, such as documentation and observation.