Respuesta :
Depending on the item sold through different transactions, Okawa Inc.'s sales transactions range in value from a few dollars to millions of dollars.
From the aforementioned scenario, it would seem that Marty is in charge of auditing Okawa Inc.'s sales transactions. Okawa Inc.'s line of work includes supplying the mining industry with a variety of makes and models of standard handing tools.
⇒ Marty can use the following techniques to compile information about the sales transactions:
Step 1: Verify and perform reconciliations for any differences, if any,
between the sales as reported in the ledger and the sales book.
Step 2: Look into any reconciling items that may exist.
Step 3: Check to see if the stated accounts receivable balance and the
general ledger balance match up because this has a direct
impact on sales.
Step 4: Select a sample of the sales transactions that were entered into
the sales book to check the accuracy and legitimacy of the
transactions.
Step 5: Get a list of supporting documents, such as invoices, purchase
orders, receipts, delivery notes for goods, etc. for each of these
samples that you have chosen.
Step 6: Examine any reported sales returns for credit memos that were
issued during the appropriate timeframe, etc.
Step 7: Carry out analytical procedures over an extended period of time
to confirm that sales have been consistent with those of prior
years.
Step 8: Send customer confirmations to check the accuracy of any
amounts that have not yet been received in full.
Step 9: Conduct a reverse audit using samples of invoices, delivery
notes, and other documents to check whether they were
correctly entered into the sales book or sales ledger.
Learn more about Sales, here
https://brainly.com/question/17186983
#SPJ4
Complete question:
Marty has to audit the sales transactions of Okawa Inc. Okawa supplies tools to the mining industry and carries a large number of different makes and models of standard mining tools. Okawa also designs and manufactures tools for special purposes and for miners operating in difficult conditions. The custom-designed tools are made only on the signing of a contract and receipt of a deposit, whereas standard tools are supplied to regular customers on receipt of a phone or email order. Okawa's sales transactions vary from a few dollars to millions of dollars depending on the number of items sold, whether the individual items are large or small tools, and whether the tools are standard items or custom designed.
Marty is instructed to gather evidence about the sales transactions using sampling and vouching. This is explained in detail in the audit program.
Required
a. Explain how Marty would select a sample of sales transactions as well as vouch the sales transactions. What primary assertion is Marty testing with the vouching procedure?
b. How could Marty use ADA as a substantive procedure?
