The following are misstatements that have occurred in Fresh Foods Grocery Store, a retail and wholesale grocery company:

1. On the last day of the year, a truckload of beef was set aside for shipment but was not

shipped. Because it was still on hand the inventory was counted. The shipping docu-

ment was dated the last day of the year, so it was also included as a current-year

sale.

2. The incorrect price was used on sales invoices for billing shipments to customers

because the wrong price was entered into the computer master file of prices.

3. A vendor invoice was paid even though no merchandise was ever received. The

accounts payable software application does not require the input of a valid receiving

report number before payment can be made.

4. Employees in the receiving department took sides of beef for their personal use. When

a shipment of meat was received, the receiving department filled out a receiving report

and forwarded it to the accounting department for the amount of goods actually

received. At that time, two sides of beef were put in an employees pickup truck rather

than in the storage freezer.

5. An accounts payable clerk processed payments to himself by adding a fictitious

vendor address to the approved vendor master file.

6. During the physical count of inventory of the retail grocery, one counter wrote

down the wrong description of several products and miscounted the quantity.

7. A salesperson sold an entire carload of lamb at a price below cost because she did

not know the cost of lamb had increased in the past week.

8. A vendors invoice was paid twice for the same shipment. The second paymen

arose because the vendor sent a duplicate copy of the original 2 weeks after the

payment was due.

a. For each misstatement, identify one or more types of controls that were absent.

b. For each misstatement, identify the transaction-related audit objectives that have not

been met.

c. For each misstatement, suggest a control to correct the deficiency.