BUS 426 Chapter Notes - Chapter 14: Audit Risk, Transaction Processing, Remittance

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 426
• Professor: Michael Favere- Marchesi

Document Summary

Classes of transactions in the sales and collection cycle. There are 5 in this cycle: sales, cash receipts, sales returns and allowances, charge-off of uncollectible accounts, bad-debt expense. Sales and collection cycle: involves the decisions and processes necessary for the transfer of the ownership of goods and services to customer after they are made available for sale. Information can be processed in two ways: Batch processing: transaction processing using groups of transactions. Online processing: the processing of transactions one at a time with an immediate update against the data files. Business functions in the cycle and related documents and. Risk assessment and the sales cycle: client business risk, audit risk, inherent risk, risk of material misstatement, risk of fraud, identify significant risks. Methodology for designing test of controls for sales. Assess planned control risk, identify and assess risks of material misstatements . Design tests of controls for sales (audit procedures, to meet transaction-related audit objectives page.