The procurement and payment cycle

There were 4,000 purchase orders that totaled $55 M for raw material. There is concern that not all purchases were completed using formal purchase orders, receipts did not match payment authorizations, and purchase orders were missing.

The accounting for inventory

There were 6,000 stock keeping units (SKUs) that totaled $22 M. Physical inventories reported inventory losses of $300,000.

http://finance.mapsofworld.com/financial-report/statement/assertions.html

For each transaction cycle you will have the chart indicated in the assignment.

• Transaction- related audit objectives = Management Assertions
• Key Internal Control = Select an Internal Control that ties to the related management assertion
• Common Test of Controls = Select an Internal Control that ties to the related management assertion
• Common Substantive Test = Select a Substantive test that ties back to the management assertion

For each management assertion you will have a control, a common test of controls, and a common substantive test. You should end of with 5 rows of information for each cycle

• For each transaction (2) you need to include the methodology that you used to develop your charts i.e. transaction related audit objective, key internal control, common test of controls, and common substantive tests
• this is the chart that has to be done for each

Transaction Cycle Name:The capital acquisition and repayment cycle Transaction-Related Audit Objective Existence Completeness valuation Rights and Obligation Presentation and Disclosure Posting and Summarization Key Internal Controls Common Tests of Controls Common Substantive Tests of Transactions Transaction Cycle Name: The sale and cash receipt cycle Transaction-Related Audit Objective Existence Completeness valuation Rights and Obligation Presentation and Disclosure Posting and Summarization Key Internal Controls Common Tests of Controls Common Substantive Tests of Transactions