Professional Documents
Culture Documents
Review the R&D Expense account detail, pick 20 items and review the
relation A/P invoice to ensure it relates to Research and Development
and not to general administration expenses.
What is classification?
Multiply the commission rate by total sales, and compare the result
with commission expense.
What is testing of detail?
Choose ten items form the repairs and maintenance expense account
and match to the original invoice to ensure the expense is valid.
What is occurrence?
Existence (balance sheet, not income statement)
Occurrence (Income statement, concern with overstatement)
Completeness (everything that happened has been reordered, is there something
that should have been in the account that isntunderstatement)
Trace the total of the account receivable list to the general ledger.
What is valuation?
Compare dates on the sales invoices and related shipping dates for
revenue just prior to year end to ensure that they relate to year under
audit (ie. Shipping and billed prior to YE)
What is testing for cut-off?
Examining vendor invoices that the client has not paid or processed.
What is completeness?