Question
You are an auditor on the Alpha Limited (Alpha) engagement. Alphas accounts receivable master file includes the following fields: Field Number Field Name 1 Debtor
You are an auditor on the Alpha Limited (Alpha) engagement. Alphas accounts receivable master file includes the following fields:
Field Number Field Name
1 | Debtor account number |
2 | Debtor name |
3 | Debtor address |
4 | Credit limit |
5 | Total balance |
6 | Balance > 60 days overdue |
7 | Sales year-to-date total |
a) Alpha has integrated a programmed input application control (a limit check refer module 2) on the credit limit field (4) above. Describe a specific, practical audit procedure you would undertake to test this application control is operating effectively.
b) Using generalised audit software, outline one (1) exception report that could be produced from the above masterfile to assist with the audit of accuracy, valuation and allocation of accounts receivable. Discuss how this report will be utilised in providing relevant evidence necessary to substantiate this assertion.
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