In: Accounting
Fish Meal Manufacturing is a small privately-owned producer of
canned fish, fish oil products for the consumer market. They hired
an auditor to perform the audit of Fish Meal for the calendar year
ended December 31, 2019. Auditor came to know that there were
fluctuation in purchase pricing on every voucher since no official
purchase order are maintained for trade purchases and delivered
goods used to be returned from the sea port due to export
department mistakes.
Based on the above scenario:
1. Identify and explain the control deficiencies, substantive
errors, and lastly other matters related to purchases and various
vouchers that the audit team will prepare. (3 marks )
2. Describe types of vouching system that the team can be used.
Answer:
a)
The auditor's goal in an audit of internal control over financial reporting is to communicate a supposition on the adequacy of the organization's internal control over financial reporting. Since an organization's internal control can't be viewed as successful on the off chance that at least one material weaknesses exist, to frame a reason for communicating an opinion, the auditor must plan and perform the audit to get proper proof that is adequate to acquire sensible confirmation about whether material weakness exist as of the date determined in the executives' assessment. A material weakness in internal control over financial reporting may exist in any event, when budget reports are not materially misstated. The auditor should utilize the equivalent reasonable, perceived control system to perform their audit of internal control over financial reporting as the executives utilizes for its yearly assessment of the viability of the organization's internal control over financial reporting.
The auditor ought to appropriately design the audit of internal control over financial reporting and appropriately regulate the engagement colleagues. When planning a coordinated audit, the auditor ought to assess whether the accompanying issues are essential to the organization's fiscal reports and internal control over financial reporting and, provided that this is true, how they will influence the auditor's methods -
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b)
There are four distinct kinds of Vouchers in Accounting. They are:
Payment voucher :
A Payment voucher is utilized to record an payment of money or check. For this situation, the money/bank will be credited and there will be a surge or outflow of funds.Payment voucher is also called as Debit voucher.
Receipt voucher :
A Receipt voucher is utilized to record money or bank receipt. Here there is an inflow of funds.Receipt voucher is also called as credit voucher. Receipt Vouchers are of two sorts:
Transfer Voucher :
Transfer vouchers are utilized for non-money transactions. They are essentially utilized as narrative proof. e.g., Goods sold on a credit premise. In these cases, the money/bank a/c of the assessee isn't influenced. Therefore the transfer voucher is also known as non-cash voucher.
Supporting Voucher :
Supporting voucher fills in as narrative proof of the exchanges occurred previously. For instance, you can join the bill of a cost alongside the original voucher just to additionally support the essential voucher. Petroleum Bills connected to the transport vouchers is a genuine case of Supporting Voucher.