Reference no: EM13349075
Question :
The subsequent are misstatements that have occurred in Fresh Foods Grocery Store, a retail and wholesale grocery company:
1. The incorrect price was used on sales invoices for billing shipments to customers due to the wrong price was entered into the computer master file of prices.
2. A vendor invoice was paid even though no products were ever received. The accounts payable software application does not require the input of a valid receiving report number before payment will be made.
3. Employees in the receiving department took sides of beef for their personal use. When a shipment of meat was received, the receiving department filled out a receiving report and forwarded it to the accounting department for the amount of goods essentially received. At that time, two sides of beef were put in an employee's pickup truck rather than in the storage freezer.
4. In the physical count of inventory of the retail grocery, one counter wrote down the wrong description of various products and miscounted the quantity.
5. A salesperson sold an entire carload of lamb at a price below cost because she did not know the cost of lamb had increased in the past week.
6. A vendor's invoice was paid twice for the same shipment. The second payment arose because the vendor sent a duplicate copy of the original weeks after the payment was due.
7. On the last day of the year, a truckload of beef was set aside for shipment but was not shipped. Due to it was still on hand the inventory was counted. The shipping document was dated the last day of the year, so it was also added as a current-year sale.
8. An accounts payable clerk processed payments to himself by adding a fictitious vendor address to the approved vendor master file.
Required
a. For each misstatement, recognize one or more types of controls that were absent.
b. For each misstatement, recognize the transaction-related audit objectives that have not been met.
c. For each misstatement, propose a control to correct the deficiency.