Question

Suppose that the accounting manager of a firm you are auditing is suspected of manipulating sales and collection transactions to make earnings and receivable payments look higher than they are. What kinds of evidence will your audit look for? Suppose that this accounting manager wanted sales to appear lower in order to reduce tax expenses. What kinds of evidence will your audit look for in this case? Please use your own words.

Answer 1

The deals may be smothered by accounting manager to show a lower assessable pay remembering the ultimate objective to diminish an expense risk.

Controlling sales/turnover are illegal and unlawful wellsprings of pay, right now is basic that inspector should check out and out and search for confirmations:

•Credit deals should be differentiate and certain focal points in the solicitations, for instance, the interest, the name, the total, etc with those gave in the Sales Book

•Cancelled solicitations ought to be checked with the copy of the receipt.

•In solicitation to attest the exactness of borrower balance, the inspector may send Statements of Accounts to the clients and take an assertion

•Sales are not ignored from being recorded in the Sales Book.

•Asset bargain isn't considered as should be expected arrangement

•Check the sections from the Sales Returns Book to the Sales Returns Accounts and Customer Ledger. The product, which are returned by the clients, are consolidated into the end stock at advertise cost or cost value whichever less is.