management assertion

management assertion

In the following table, there are listed common audit objectives for accounts receivable or sales. For each procedure, list the management assertion, and the related general audit objective. State whether the audit objective is transaction-related or balance-related.

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Accounts receivable or sales objectives    Management assertion    Audit objective    Transaction-related (Y/N)    Balance-related (Y/N)
1. Accounts receivable in the accounts receivable trial balance are for valid sales.
2. Recorded sales are for goods and services provided.
3. All sales transactions are recorded.
4. Recorded sales transactions are recorded at the correct amount.
5. Sales transactions are correctly allocated between current and long-term.
6. Sales transactions are recorded on the correct dates.
7. Sales transactions are properly included in the customer and receivable master files, and are correctly posted to the general ledger.
8. The accounts receivables recorded in receivables are receivables of the company.

Question Two
You have been assigned the in-charge-auditor for a new client, Beltair House. Beltair House is a non-profit charitable organization which operates a home for unwed mothers who have decided that they would like to keep their child. In the past, the organization had been almost fully funded by the provincial government. However, due to recent budget cut-backs, Beltair has to raise operating funds from public donations.
Because of financial constraints, there is now only one full time manager, Joan Ng. Joan has the help of several volunteers, and the residents help out with the chores and with maintenance and cleaning. Ng has been able to arrange for a local food bank to provide a large portion of the food required for meals. Door-to-door canvassers have been able to raise money to keep the House going, but Ng is concerned that this will change.
Required:
Identify issues that you will need to consider that affect the risk of this audit engagement.

Question 3
Identify the major steps on developing the client risk profile. Provide an example of audit evidence for each step.

Major steps in developing the client risk profile    An example of audit evidence for each step