Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 62

Performing tests of controls for the revenue process. Review the list of controls that could be present in the revenue process and determine the audit procedures that could be performed to test the control. For each procedure, indicate the management assertion that the auditor gathers evidence to evaluate while performing the test.
a. Prenumbered shipping documents are completed in the shipping department.
b. Sales invoices are prenumbered.
c. Customer credit is approved before orders are shipped.
d. Credit memos are prenumbered and the sequence is checked for missing documents.
e. Customer statements are mailed monthly by the accounts receivable department.