Reference no: EM133180101

Question - Stephen is the audit manager in charge of the audit of Good Profit Limited (GP), a new retail client in the city. In his audit planning, he asks his audit senior, Eve to study the sales and collection cycle of GP. Among other things, Eve reports the following findings which make Stephen worry about the audit to come.

1. The quantity and price in some sale invoices do not tally with the information in the shipping documents and customer orders.

2. Some customers' orders are not approved and some customers exceeding credit limit are approved the sales.

3. Some shipping documents have the same number while some others are untraceable.

Required - For each of the above events, (i) discuss an internal control procedure that could prevent the happening of the events, (ii) identify the transaction-related audit objectives that are at risk, and (iii) recommend an audit test to check for possible misstatements.