The following procedures are audit procedures in the sales and collection cycle:

1.Examine a sample of shipping documents to determine that each has a sales invoice number on it.

2.Examine a sample of non-cash credit entries in the accounts receivable master file to determine if the internal auditor has initialled each one, to indicate he/she has internally verified each one.

3.Discuss with the sales manager whether any sales allowances have been granted after balance sheet date, that may relate to the current accounting period.

4.Add the columns of figures on the aged trial balance, and compare the total with the general ledger balance for accounts receivable.

5.Observe if the chief accountant makes any independent check to compare the general ledger accounts receivable balance amount with the amount recordedfor accounts receivable in thetrial balance.

6.Compare the date on a sample of shipping documents with the related sales invoice duplicate, and with the accounts receivable master file.

7.Examine a sample of customer orders to check that each has a credit authorisation.

8.Compare the date on a sample of shipping documents for the days a few days before and a few days after balance date, with related sales journal entries.

9.Compute the ratio of allowance for doubtful debts divided by accounts receivable total, and compare the ratio with previous years' ratios.

Required:

(a)For each procedure, identify the type of audit evidence that is applicable.

"Types of Audit Evidence"

(b)Identify each procedure as one of the following:

Test of controls

Substantive test of transactions

Analytical procedure

Tests of details of balances

(c)For the procedures you identified as a test of controls or substantive tests of transactions, what transaction-related audit objective(s) are being satisfied?

(transaction related audit objectives)

(d)For the procedures you identified as a test of details of balances, what balance-related audit objective(s) are being satisfied?

(balance related audit objectives)

1.(this is a sample answer)

a. Documentation

b. (1) Test of control

Completeness

c. (Transaction-related)

2.

3.

4.

5.

6.

7.

8.

9.