You are a senior auditor with Rodriguez & Jones, a small auditing firm located in Canterbury, an eastern suburb of Melbourne, Victoria. Your team has been assigned to the audit of a new client, Millers Merchandise, for the year ended 30th June 2021. Millers Merchandise is a Deepdene-based wholesaler offering for sale everything from baby food and beverages, to snacks and vegetables, and everything in between.
You are planning the audit of accounts payable, where preparatory work has revealed the following:
- Millers Merchandise purchases its stock from a list of approved suppliers, with purchase orders processed electronically through a business-to-business ecommerce system. This system uses a fast chain model of supply, with suppliers electronically transmitting their invoices this automated approach means supplier invoices are credited directly to the accounts payable file of Millers Merchandise upon receipt of the purchase order. You are concerned about the impact this might have on the existence assertion.
- A key control to safeguard the Valuation and Allocation assertion, is the use of key entry validation an IT control whereby the Number of Units Purchased is multiplied by the Unit Cost, and compared with the Total Cost as per the suppliers invoice.
- As is always the case with accounts payable and purchases, you are have flagged the need to investigate the risk associated with the completeness assertion.
- As Millers Merchandise operates both in a B2B and B2C environments, you need to test the security and operation of these systems. You are concerned there may be some overlap, thereby putting the classification assertion at risk.
- The owner of Millers Merchandise (Suzie Miller) owns and operates another business, Brazeele Mottley, out of Broadmeadows. To make most use of the combined purchasing power, Suzie combines purchases for both businesses where possible. This makes you concerned the rights and obligation assertion for Millers Merchandises accounts payable may be at risk.
- Interrogate the 2020/2021 accounts payable data provided, developing visualizations to identify potential issues to follow up during the audit. Specifically you are required to comment on the following assertions at risk:
- Existence;
- Valuation and Allocation;
- Completeness;
- Classification;
- Rights and Obligations.
For each of the above:
- Explain what the assertion means as it relates to Millers Merchandise;
- Present relevant data visualisations for the assertion being investigated;
- Discussion/Interpretation of Findings/Data Visualisations.
- Discuss the most appropriate audit strategy to adopt when auditing the accounts payable for Millers Merchandise.
00 Own 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Supplier ID CG-12520 DV-13045 SO-20335 BH-11710 AA-10480 IM-15070 HP-14815 PK-19075 AG-10270 ZD-21925 KB-16585 SF-20065 EB-13870 EH-13945 TB-21520 MA-17560 GH-14485 SN-20710 LC-16930 RA-19885 ES-14080 ON-18715 PO-18865 LH-16900 DP-13000 JM-15265 TB-21055 KM-16720 PS-18970 BS-11590 KD-16270 HM-14980 TB-21520 JE-15745 KB-16600 JE-15745 SC-20770 Supplier Name Claire Gute Darrin Van Huff Sean O'Donnell Brosina Hoffman Andrew Allen Irene Maddox Harold Pawlan Pete Kriz Alejandro Grove Zuschuss Donatelli Ken Black Sandra Flanagan Emily Burns Eric Hoffmann Tracy Blumstein Matt Abelman Gene Hale Steve Nguyen Linda Cazamias Ruben Ausman Erin Smith Odella Nelson Patrick O'Donnell Lena Hernandez Darren Powers Janet Molinari Ted Butterfield Kunst Miller Paul Stevenson Brendan Sweed Karen Daniels Henry MacAllister Tracy Blumstein Joel Eaton Ken Brennan Joel Eaton Stewart Carmichael Accts Payable data Approved Suppliers + 1 2 3 4 5 6 O 7 8 9 10 10 11 12 13 14 Supplier Name David Smith Jasper Cacioppo Olvera Toch Logan Currie Valerie Dominguez Brosina Hoffman Office Supplies Alan Shonely Personal Care Item Type 7201 Office Supplies 3545 Cosmetics 4517 Fruits 3584 Cosmetics 6729 Office Supplies 8517 Snacks 3978 19 Cosmetics 7157 ce 2225 2225 Cereal Cereal 0322 8522 Snacks Slacks 9266 Vegetables 200 vegetabl 4693 Fruits ws 725 Baby Food 7919 7455 Office Supplies 8262 Personal Care 444 Baby Food Baby 9118 Snacks 6240 Meat 9573 1 Vegetables 1331 Beverages Dever 2115 ancar 1700 Cereal acco 619 Baby Food 6104 Meat 3820 an 6998 Office Supplies 7538 Personal Care 2563 2553 Clothes Clothes 7047 7847 Personal Care 7680 Personal Care Meet 9777 Vegetables 4420 4179 Fruits 6058 Meat 5922 Meat 1740 Cereal 258 Baby Food 15 1 16 20 17 18 19 - 20 21 22 23 24 25 26 27 28 29 30 31 - 32 33 34 a 35 36 37 38 Supplier Code DS-13180 JC-15340 OT-18730 LC-17140 VD-21670 Word BH-11710 ADIVATU AS-10240 TW-21025 WW2.1023 - BB-10990 CG-12040 wa BW-11110 PO-18865 Food JM-15250 www PO-18865 Red KH-16510 NU MS-17365 RK-19300 MT-18070 woord MS-17365 - ware MP-17965 are MV-18190 CK-12760 JJ-15760 LL-16840 JJ-15760 KL-16555 GK-14620 AS-10240 ZC-21910 20-1010 W 2005 CW-11905 2000 TD-20995 100 RC-19825 DE 420 RF-19735 VI.16555 KL-16555 BD-11320 TN-21040 CR-12730 Order Date 28/08/2020 05/10/2020 05/03/2021 31/07/2020 31/07/2020 11/10/2020 20/01/2021 12/01/2021 12/01/2021 08/09/2020 Vom/2020 21/02/2021 17/07/2020 we 15/02/2021 04/04/2021 09/08/2020 2020 24/03/2021 23/11/2020 15/01/2021 2. 15/05/2021 --- 09/04/2021 05/05/2021 20/07/2020 02/01/2021 even 30/03/2021 23/08/2020 05/06/2021 15/10/2020 01/07/2020 25/11/2020 24/01/2021 01/03/2021 27/02/2021 COM 08/10/2020 11111 15/01/2021 2015020 30/12/2020 06/10/2020 19/11/2020 17/02/2021 20/11/2020 Tamara Willingham Barry Blumstein Catherine Glotzbach Bart Watters Patrick O'Donnell Fathome Janet Martin Patrick O'Donnell Patrick Donnen Keith Herrera nech need Maribeth Schnelling Nacy Ralph Kennedy Michelle Tran wanne man Maribeth Schnelling Michael Paige wonde Page Mike Vittorini new cyniey Cyma Kinney Joel Jenkins wa en Leatherbury Joel Jenkins Kelly Lampkin sampai Grace Kelly Alan Shonely Zuschuss Carroll Carl Weiss Tamara Dahlen Tambah Bow Collins Roy Collins Roland Fjeld Kelly Lampkin Bill Donatelli Tanja Norvell Craig Reiter Purchase Order Invoice Number PO-2021.1622 INV-100089156 PO-2021.2625 INV-100168120 PO-2021.6842 INV-100200736 PO-2021.820 INV-100315320 PO-2021.2807 INV-100435912 PO-2021.5636 INV-100598990 PO-2021.5371 INV-100621736 PO-2021.1908 INV-100674521 PO-2021.6468 INV-100810134 INV100810134 PO-2021.453 INV-100813996 PO-2021.6322 INV-100913560 "wewe PO-2021.7653 INV-100935447 were PO-2021.1081 R.100 INV-100990378 PO-2021.7354 INV-101056468 1. PO-2021.4031 - INV-101077067 ca PO-2021.5475 INV-101141870 1 PO-2021.8734 INV-101274907 201411201 PO-2021.7786 INV-101289498 ro 102 PO-2021.8472 INV-101455152 PO-2021.527 ra INV-101491630 ---- PO-2021.5102 INV-101580035 aveva Vivo PO-2021.7500 INV-101696765 evede 100 PO-2021.1471 INV-101813924 000 D- PO-2021.9320 INV-101823794 2009 PO-2021.2926 INV-101836240 ade PO-2021.12 INV-101844823 ades ***** PO-2021.4086 INV-101917779 PO-2021.5750 INV-101929795 021671 IVE PO-2021.6714 INV-101939666 PO-2021.6665 2004 ECCE INV-102014338 24400 MONS PO-2021.2728 INV-102073132 40525200 PO-2021.5481 INV-102293288 24 24 TAILOR PO-2021.5031 INV-102362811 PO-2021.2659 PO-2021.3905 - INV-102554643 PO-2021.6360 INV-102709996 PO-2021.3920 INV-102760636 Ship Date 29/08/2020 06/10/2020 07/03/2021 02/08/2020 12/10/2020 12/10/2020 21/01/2021 14/01/2021 14/01/2021 09/09/2020 VU 23/02/2021 19/07/2020 1910 17/02/2021 1012041 05/04/2021 05/04/2021 10/08/2020 25/03/2021 25/11/2020 1020 16/01/2021 16/05/2021 10102 11/04/2021 202 06/05/2021 22/07/2020 Have 03/01/2021 LU 31/03/2021 VET 25/08/2020 06/06/2021 16/10/2020 02/07/2020 26/11/2020 26/01/2021 2012 28/02/2021 Mon 09/10/2020 2016 17/01/2021 31/12/2020 07/10/2020 20/11/2020 19/02/2021 22/11/2020 Units Purchased 11 33 26 20 30 SU 33 5 7 37 32 34 2 2 19 *** 7 7 7 5 13 8 8 23 20 33 15 15 1 40 20 1 34 31 27 35 5 4 13 Unit Cost 28.00 18.00 4.00 6.00 0.00 0.00 8.00 9.00 4.00 16.00 10.00 33.00 3.vy 9.00 2.09 7.00 2.00 wer 7.00 7.00 29.00 Seco 28.00 weer 46.00 wered 22.00 2. 10.00 10.00 9.00 2.de 5.00 wave 7.00 here 4.00 10.00 6.00 15.00 15.00 29.00 28.00 55.00 2000 30.00 2000 38.00 200 7.00 4.00 100 10.00 10.00 3.00 4.00 Cereal Total Cost 308.00 594.00 104.00 180.00 264.00 20.00 112.00 1,221.00 288.00 14.00 14.09 38.00 49.00 . 49.00 145.00 . 364.00 368.00 wo.co 506,00 www.ce 200.00 o.co 297.00 ico 75.00 3.00 105.00 4.00 400.00 ove 120.00 *. 15.00 ware 510.00 www. 899.00 756.00 25 1,925.00 100 150.00 10400 494.00 140 210.00 120.00 128.00 270.00 310.00 87.00 68.00 Cosmetics 30 32 INV-102393281 27 31 29 17 00 Own 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Supplier ID CG-12520 DV-13045 SO-20335 BH-11710 AA-10480 IM-15070 HP-14815 PK-19075 AG-10270 ZD-21925 KB-16585 SF-20065 EB-13870 EH-13945 TB-21520 MA-17560 GH-14485 SN-20710 LC-16930 RA-19885 ES-14080 ON-18715 PO-18865 LH-16900 DP-13000 JM-15265 TB-21055 KM-16720 PS-18970 BS-11590 KD-16270 HM-14980 TB-21520 JE-15745 KB-16600 JE-15745 SC-20770 Supplier Name Claire Gute Darrin Van Huff Sean O'Donnell Brosina Hoffman Andrew Allen Irene Maddox Harold Pawlan Pete Kriz Alejandro Grove Zuschuss Donatelli Ken Black Sandra Flanagan Emily Burns Eric Hoffmann Tracy Blumstein Matt Abelman Gene Hale Steve Nguyen Linda Cazamias Ruben Ausman Erin Smith Odella Nelson Patrick O'Donnell Lena Hernandez Darren Powers Janet Molinari Ted Butterfield Kunst Miller Paul Stevenson Brendan Sweed Karen Daniels Henry MacAllister Tracy Blumstein Joel Eaton Ken Brennan Joel Eaton Stewart Carmichael Accts Payable data Approved Suppliers + 1 2 3 4 5 6 O 7 8 9 10 10 11 12 13 14 Supplier Name David Smith Jasper Cacioppo Olvera Toch Logan Currie Valerie Dominguez Brosina Hoffman Office Supplies Alan Shonely Personal Care Item Type 7201 Office Supplies 3545 Cosmetics 4517 Fruits 3584 Cosmetics 6729 Office Supplies 8517 Snacks 3978 19 Cosmetics 7157 ce 2225 2225 Cereal Cereal 0322 8522 Snacks Slacks 9266 Vegetables 200 vegetabl 4693 Fruits ws 725 Baby Food 7919 7455 Office Supplies 8262 Personal Care 444 Baby Food Baby 9118 Snacks 6240 Meat 9573 1 Vegetables 1331 Beverages Dever 2115 ancar 1700 Cereal acco 619 Baby Food 6104 Meat 3820 an 6998 Office Supplies 7538 Personal Care 2563 2553 Clothes Clothes 7047 7847 Personal Care 7680 Personal Care Meet 9777 Vegetables 4420 4179 Fruits 6058 Meat 5922 Meat 1740 Cereal 258 Baby Food 15 1 16 20 17 18 19 - 20 21 22 23 24 25 26 27 28 29 30 31 - 32 33 34 a 35 36 37 38 Supplier Code DS-13180 JC-15340 OT-18730 LC-17140 VD-21670 Word BH-11710 ADIVATU AS-10240 TW-21025 WW2.1023 - BB-10990 CG-12040 wa BW-11110 PO-18865 Food JM-15250 www PO-18865 Red KH-16510 NU MS-17365 RK-19300 MT-18070 woord MS-17365 - ware MP-17965 are MV-18190 CK-12760 JJ-15760 LL-16840 JJ-15760 KL-16555 GK-14620 AS-10240 ZC-21910 20-1010 W 2005 CW-11905 2000 TD-20995 100 RC-19825 DE 420 RF-19735 VI.16555 KL-16555 BD-11320 TN-21040 CR-12730 Order Date 28/08/2020 05/10/2020 05/03/2021 31/07/2020 31/07/2020 11/10/2020 20/01/2021 12/01/2021 12/01/2021 08/09/2020 Vom/2020 21/02/2021 17/07/2020 we 15/02/2021 04/04/2021 09/08/2020 2020 24/03/2021 23/11/2020 15/01/2021 2. 15/05/2021 --- 09/04/2021 05/05/2021 20/07/2020 02/01/2021 even 30/03/2021 23/08/2020 05/06/2021 15/10/2020 01/07/2020 25/11/2020 24/01/2021 01/03/2021 27/02/2021 COM 08/10/2020 11111 15/01/2021 2015020 30/12/2020 06/10/2020 19/11/2020 17/02/2021 20/11/2020 Tamara Willingham Barry Blumstein Catherine Glotzbach Bart Watters Patrick O'Donnell Fathome Janet Martin Patrick O'Donnell Patrick Donnen Keith Herrera nech need Maribeth Schnelling Nacy Ralph Kennedy Michelle Tran wanne man Maribeth Schnelling Michael Paige wonde Page Mike Vittorini new cyniey Cyma Kinney Joel Jenkins wa en Leatherbury Joel Jenkins Kelly Lampkin sampai Grace Kelly Alan Shonely Zuschuss Carroll Carl Weiss Tamara Dahlen Tambah Bow Collins Roy Collins Roland Fjeld Kelly Lampkin Bill Donatelli Tanja Norvell Craig Reiter Purchase Order Invoice Number PO-2021.1622 INV-100089156 PO-2021.2625 INV-100168120 PO-2021.6842 INV-100200736 PO-2021.820 INV-100315320 PO-2021.2807 INV-100435912 PO-2021.5636 INV-100598990 PO-2021.5371 INV-100621736 PO-2021.1908 INV-100674521 PO-2021.6468 INV-100810134 INV100810134 PO-2021.453 INV-100813996 PO-2021.6322 INV-100913560 "wewe PO-2021.7653 INV-100935447 were PO-2021.1081 R.100 INV-100990378 PO-2021.7354 INV-101056468 1. PO-2021.4031 - INV-101077067 ca PO-2021.5475 INV-101141870 1 PO-2021.8734 INV-101274907 201411201 PO-2021.7786 INV-101289498 ro 102 PO-2021.8472 INV-101455152 PO-2021.527 ra INV-101491630 ---- PO-2021.5102 INV-101580035 aveva Vivo PO-2021.7500 INV-101696765 evede 100 PO-2021.1471 INV-101813924 000 D- PO-2021.9320 INV-101823794 2009 PO-2021.2926 INV-101836240 ade PO-2021.12 INV-101844823 ades ***** PO-2021.4086 INV-101917779 PO-2021.5750 INV-101929795 021671 IVE PO-2021.6714 INV-101939666 PO-2021.6665 2004 ECCE INV-102014338 24400 MONS PO-2021.2728 INV-102073132 40525200 PO-2021.5481 INV-102293288 24 24 TAILOR PO-2021.5031 INV-102362811 PO-2021.2659 PO-2021.3905 - INV-102554643 PO-2021.6360 INV-102709996 PO-2021.3920 INV-102760636 Ship Date 29/08/2020 06/10/2020 07/03/2021 02/08/2020 12/10/2020 12/10/2020 21/01/2021 14/01/2021 14/01/2021 09/09/2020 VU 23/02/2021 19/07/2020 1910 17/02/2021 1012041 05/04/2021 05/04/2021 10/08/2020 25/03/2021 25/11/2020 1020 16/01/2021 16/05/2021 10102 11/04/2021 202 06/05/2021 22/07/2020 Have 03/01/2021 LU 31/03/2021 VET 25/08/2020 06/06/2021 16/10/2020 02/07/2020 26/11/2020 26/01/2021 2012 28/02/2021 Mon 09/10/2020 2016 17/01/2021 31/12/2020 07/10/2020 20/11/2020 19/02/2021 22/11/2020 Units Purchased 11 33 26 20 30 SU 33 5 7 37 32 34 2 2 19 *** 7 7 7 5 13 8 8 23 20 33 15 15 1 40 20 1 34 31 27 35 5 4 13 Unit Cost 28.00 18.00 4.00 6.00 0.00 0.00 8.00 9.00 4.00 16.00 10.00 33.00 3.vy 9.00 2.09 7.00 2.00 wer 7.00 7.00 29.00 Seco 28.00 weer 46.00 wered 22.00 2. 10.00 10.00 9.00 2.de 5.00 wave 7.00 here 4.00 10.00 6.00 15.00 15.00 29.00 28.00 55.00 2000 30.00 2000 38.00 200 7.00 4.00 100 10.00 10.00 3.00 4.00 Cereal Total Cost 308.00 594.00 104.00 180.00 264.00 20.00 112.00 1,221.00 288.00 14.00 14.09 38.00 49.00 . 49.00 145.00 . 364.00 368.00 wo.co 506,00 www.ce 200.00 o.co 297.00 ico 75.00 3.00 105.00 4.00 400.00 ove 120.00 *. 15.00 ware 510.00 www. 899.00 756.00 25 1,925.00 100 150.00 10400 494.00 140 210.00 120.00 128.00 270.00 310.00 87.00 68.00 Cosmetics 30 32 INV-102393281 27 31 29 17
