In: Accounting
01.Auditing Sales and Accounts Receivable Cycle
Accounts
While auditing sales one must be concerned about fictitious
shipments, special privileges to some customers as compared to
others, manipulation of sales calculations to increase sales
figure, goods send on consignment recorded as sales before they are
actually sold etc. One of the major concerns that is to be taken
care of during the auditing of receivables is the possibility of
teeming and lading i.e. where one customers payment is allocated to
another customers account to hide theft or a shortfall in balances.
Other factors to be considered also includes verifying the
existence of accounts receivable.
02.Auditing Expenditures and Account Payable Cycle
Accounts
Concerns while auditing expenses and account payable cycle includes
the intentional understatement of expenses and payables, payments
made to wrong vendors, and duplicate payments where one vendor is
paid more than once. There are also chances of fictitious vendors
and hence exist the chance of fraud by the employees or those
charged with governance.
03.Auditing Payroll Cycle Accounts
One should be concerned about the possibility of payroll frauds
while auditing payroll frauds. The concerns include improper salary
payments by fabricating the work hours, creation of fictitious
employees. Overstating expenses in-order to understate the profits
of an entity is also a concern that should be taken care
of.