Question

Auditing Cash, Financial Instruments, Sale, and Receivable Accounts:

A summary of specific financial information gleaned from the current Form 10-K used to perform an analysis of work program steps. For example, if the team noted significant swings in the Receivables balance year-over-year, identify these swings and how you address them in your work program (this is in essence an audit procedure - analytical review).

Company is Walmart

Answer 1

Auditing Cash, Financial Instruments, Sale, and Receivables Accounts

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Assignment ContentThe first step is to go to the website of a company and select the most recent 10-K Form, a legally-required document publicly-traded companies must submit to the Securities and Exchange Commission [SEC] on an annual basis. Among other things, this document contains the opinion of the CPA firm regarding the company’s financial statements and adherence to Generally Accepted Accounting Principles [GAAP]. The contents of this form will be the basis of the team assignments in throughout the course. Consider and discuss the specific risks and nature of the company you will be auditing.Create comprehensive audit programs for the cash, financial instruments, sale, and receivables accounts and cycles. document that includes:Audit steps for tests of controls, balances, transactions, analytical procedures, etc. as well as other considerations such as sample size and sample methodology. A brief summary page should be included in this document, 350 to 700 words for each of the audit programs. Include in this summary specific financial information gleaned from the current Form 10-K used to perform an analysis of work program steps. For example, if the team noted significant swings in the Receivables balance year-over-year, identify these swings and how you address them in your work program (this is in essence an audit procedure – analytical review). The Company we chose was Walmart  part in this assignment is Audit steps for tests of controls/balances-

Account for a sequence of documents and examine each one to make sure that a duplicate sales invoice is attached.
. Account for a sequence of sales invoices and examine each one to make sure that a duplicate copy of the document is attached.
. Compare the quantity and description of items on documents with the related duplicate sales invoices.
. Trace recorded sales in the sales journal to the related accounts receivable master file and compare the customer name, date, and amount for each one.
. Examine sales returns for approval by an authorized official.
. Review the prelisting of cash receipts to determine whether cash is prelisted daily.
. Reconcile the recorded cash receipts on the prelisting with the cash receipts journal and the bank statement for a 1-month period.
Required
. Identify whether each audit procedure is a test of control or a substantive test of transactions.
. State which of the six transaction-related audit objectives each of the audit procedures fulfills.
. Identify the type of evidence used for each audit procedure, such as inspection and observation

.Inventory, Warehousing, and Payroll accounts and cycles
Consider and discuss the specific risks and nature of the company you will be auditing and create comprehensive work programs for the Inventory, Warehousing, and Payroll accounts and cycles.

• Audit steps for tests of controls, balances, transactions, analytical procedures, etc. as well as other considerations such as sample size and sample methodology.

Reconcile the monthly payroll total for direct manufacturing labor with the labor cost distribution.
2. Examine the time card for the approval of a foreman.
3. Recompute hours on the time card and compare the total with the total hours for which the employee has been paid.
4. Perform a surprise payroll payoff and observe employees picking up and signing for their checks.
5. Compare the employee name, date, check number, and amounts on cancelled checks with the payroll journal.
6. Trace the hours from the employee time cards to job tickets to make sure that the total reconciles, and trace each job ticket to the job-cost record.
7. Use audit software to account for the sequence of payroll checks in the payroll journal.
Required
a. Identify whether each of the procedures is primarily a test of control or a substantive test of transactions.
b. Identify the transaction-related audit objective(s) of each of the procedures.

Only authorized inventory warehousing personnel are allowed in inventory storage areas.
2. All inventory products are stored in warehousing areas that are segregated from other storage areas used to house equipment and supplies.
3. All inventory held on consignment at Frist Corporation is stored in a separate area of the warehouse.
4. The inventory purchasing system only allows purchases from pre-approved vendors.
5. The perpetual inventory system tracks the average number of days each inventory product number has been in the warehouse.
6. Microchips are embedded in each product and when inventory items are removed from the warehouse to shipping, radio-frequencies signal a deduction of inventory to the perpetual inventory system.
7. On a weekly basis, inventory accounting personnel take samples of inventory products selected from the perpetual inventory system and verify that the inventory is on-hand in the warehouse and that the quantities in the listing are correct.
8. On a weekly basis, inventory accounting personnel select inventory items on hand in the warehouse and verify that the item is included in the perpetual inventory listing at the correct amount.
9. The perpetual inventory system subtotals the quantity of inventory in the system and interfaces with the general ledger system on a daily basis to ensure quantities agree.
10. The perpetual inventory system will not accept inventory additions without the recording on a valid receiving report.
For each of the internal controls:
Required
a. Identify the related transaction-related audit objective(s) affected by the control.
b. Describe risks the control is designed to mitigate.
c. Design a test of control to determine if the control is operating effectively.