You are an audit staff senior and you are going to assign the task to perform tests of controls for sales and collection and test of details of balances for accounts receivable for the three engagements to your audit junior. You would like to form an expectation on the time required for these simultaneous engagements for the audit junior. The three clients are described below:

Company 1	Al&Bee is a medium-sized retailer selling luxury handbags and accessory items. Its headquarter is in Singapore. During this year, Al&Bee started expanding its business and established a number of shops in various Asia Pacific countries including Taiwan and Hong Kong. Al&Bee has been a client of the audit firm for 5 years. Based on the previous audit results, there have been a few internal controls in place and there have been some audit adjustments suggested by the auditor every year. Al&Bee adjusted its accounting records accordingly. Although Al&Bee has expanded its business during the year, its sales have not increased as much as expected, partly attributable to the slow down of economies in the region.
Company 2	Co&Dan operates a chain of supermarkets in Singapore and is having its shares listed on the stock exchange. Co&Dan has been a client of the audit firm for 20 years and have implemented sophisticated internal controls for its sales and collection cycle, including automated point of sale system at the cashier 10 years ago. Majority of its sales are made in either cash or credit cards. There has been seldom audit adjustment based on prior years' audit experience. Its sales have grown at a reasonable rate throughout the past few years and its performance is not materially affected by the economic slowdown as Co&Dan sells necessity items.
Company 3	El&Fan, same as Al&Bee, is a medium-sized retailer selling handbags and accessory items. El&Fan is a family-owned company and it is a new client to the audit firm. Based on the preliminary understanding of the internal control of El&Fan, it is noted that there has not been much segregation of duties within the company due to limited manpower.

Devise an evidence mix for the audit of sales and collection cycle for the three clients above with respect to tests of control, substantive tests of transactions, analytical procedures and tests of details of balances. Justify whether extensive amount (E), medium amount (M), small amount of testing (S) or no testing (N) is expected. Rank the relative time required for your tasks in the three audit engagements.

Begin by devising an evidence mix for the audit of sales and collection cycle for company 1 (Al&Bee). (Abbreviations used:

E=Extensive

amount of testing;

M=Medium

amount of testing;

S=Small

amount of testing;

N=No

testing.)

	Audit program	Type of test
1.	Tests of control
2.	Substantive tests of transactions
3.	Analytical procedure
4.	Tests of details of balances

Now, devise an evidence mix for the audit of sales and collection cycle for company 2 (Co&Dan). (Abbreviations used:

E=Extensive

amount of testing;

M=Medium

amount of testing;

S=Small

amount of testing;

N=No

testing.)

	Audit program	Type of test
1.	Tests of control
2.	Substantive tests of transactions
3.	Analytical procedure
4.	Tests of details of balances

Next, devise an evidence mix for the audit of sales and collection cycle for company 3 (El&Fan). (Abbreviations used:

E=Extensive

amount of testing;

M=Medium

amount of testing;

S=Small

amount of testing;

N=No

testing.)

	Audit program	Type of test
1.	Tests of control
2.	Substantive tests of transactions
3.	Analytical procedure
4.	Tests of details of balances

Rank the relative time required for your tasks in the three audit engagements.

Time required for performing tests of controls for sales and collection and test of details of balances for accounts receivable for the three audits is:

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