The purpose of these assignments is to gain an understanding of the revenue and purchasing cycles, using the example company from the textbook (Earthwear Clothiers). We will perform various audit tasks in class for Chapters 10 & 11 and you should be familiar with typical revenue and purchasing systems. Remember, you can't audit a company you don't understand!

For the revenue process, refer to Figure 10-2 (p. 344 - p. 346). In a memo that should be no longer than one page, please narrative describing how a revenue transaction goes through the Company (e.g., "A customer sales order is received via mail, fax, phone, or internet. This is input into the system, which validates the order as to inventory availability, etc..."). Describe the flow of a transaction including shipment, billing, and how the cash receipt is handled.

The revenue process flowcharts are described in greater detail in the text on pages 342 - 351, but of course you shouldn't copy what's in the text. This should be a concise narrative, which requires you to identify the key points in the process. You don't have to describe every item in the flowcharts. Just stick to the key events in the revenue process.

You will then do the same thing for the purchasing cycle. Refer to Figure 11-1 on pgs. 390-391 and narrative (no more than one page) describing how a purchase is made and ultimately paid by the company. The flowchart is described in greater detail on pgs. 388 - 395.

For both of these narratives, you may work or in teams of two. If you work in a team please submit only ONE assignment for each narrative through, and make sure both names are on the assignment, otherwise only the submitting student will receive credit. If this assignment is taking you more than an hour, you're either over-thinking it or missing the point. Let me know if you have any question