Question

Problem –2

You are an audit manager for Rodgers & Co. and have recently taken on a new client, Manufacturing Company. You are in the initial stages of planning the audit and have decided to start gathering information about the sales/collection cycle of the business. List below the classes of transactions that you need to gather audit evidence for in designing your audit procedures

Answer 1

As an audit manager, If i am gathering information about sales and collection cycle then below class of transactions data i would be asking to gather evidences

1. Sales register (Sales GL) Sub ledger wise (Customer wise)

2. Accounts receivable Ledger

3. Bad debts expense A/c

4. Allowance for bad debts A/c

5.Cash discount and allowances A/c