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Briefly describe the audit tests

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Reference no: EM132038342

Question:

Sherwood Textiles manufactures knitted cloths and dyes these clothes and other textiles. You are carrying out the audit of the accounts of the company for the year ended 31st March which shows a turnover of about $10 million, a profit before tax of about $800,000.

You are attending the final audit in June and are commencing the audit of trade receivables, which are shown in the draft accounts at $2,060,000.

The interim audit (i.e. control testing) was carried out in February and it showed that there was a good system of internal control in the sales system, as no serious errors were found in the control tests.

The company's sales ledger is maintained on a computer, which produces at the end of each month:
1. A list of transactions for the month
2. An aged list of balances, and
3. Statements

REQUIRED

a) List and briefly describe the audit tests you would carry out to verify trade receivables at the year end - you are not required to describe how would carry out a receivables' circularisation

b) Explain the difference between positive and negative circularisation

c) Describe the audit work you would carry out on the following replies to a positive receivables'circularisation:
i. Balance agreed by receivables
ii. Balance not agreed by receivables
iii. Receivables does not reply to the circularisation

Verified Expert

This matter deals with auditing standards from a baseline perspective and then formulating and describing them in context to the stated question. Hence this assignment requires an great understanding and evaluations technique with respect to auditing.

Reference no: EM132038342

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Reviews

inf2038342

8/13/2018 3:05:56 AM

This is a very important subject to me, and this is diploma level. I want the highest mark in the class. PLEASE,DO IT WELL, WITH THE REQUIRED MARK. PLEASE GIVE AN EXAMPLE WITH THE ANSWER. If the question is required 5marks,and the words should be half of pages.The answer should included the key word, elaborate, example. words Font size is 12.

inf2038342

7/26/2018 2:14:18 AM

The assignment was well written and very precisely done. They explained each and every part of the solution. Every answer is well explained and points are highlighted. Thank you for the solution.

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