What are the four substantive procedures for abc

Reference no: EM132480469

Point 1: ABC Ltd. is a distributor of ski equipment. The company's records includes sales and purchase orders, purchasing invoices, a sales journal, a purchases journal, and sub ledgers for both payables and receivables. There is a Canadian and a U.S. bank account.

Point 2: All customers have a pre-determined credit limit that is noted in their files. If a customer's order exceeds the authorized credit limit, the credit manager must approve the sale; otherwise, the sales clerk enters and approves the order for processing.

Point 3: The allowance for doubtful accounts shows that $75,000 worth of receivables are greater than 90 days past due. There are no past due accounts payable. ABC has 4 U.S. suppliers. An allowance for doubtful accounts is prepared by management and done on a case by case basis based on past payment history and management judgment.

Point 4: The accounting department receives a report each day of goods shipped and purchased goods received. All shipments are invoiced within one day of shipment.

Point 5: All liabilities are paid within 30 days. An accrual listing is prepared from unmatched receiving reports each month.

Required

Question 1: What are the 4 substantive procedures for ABC? For each audit procedure, be clear in the type of procedure e.g. tracing, vouching, observing, scanning, and so on and state the related key management assertion.

Reference no: EM132480469

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