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Essay Available:
Pages:
3 pages/β‰ˆ825 words
Sources:
2 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 15.8
Topic:

Substantive Procedures for Cash Outflow Irregularities

Essay Instructions:

Resource: Apollo Shoes Casebook (see attached) Outline substantive procedures by using the Apollo Shoes Casebook for detecting irregularities in each of the following audit cycles: • Cash • Accounts payable • Payroll Design an audit program for the cycle in no more than 1,000 words. Consider using a checklist or flowchart to outline your process. Should have narratives for each section. You may use checklists or flowcharts as a supplement to the narrative. The use of checklists and/or flowcharts can be a way to cover more information for each section. Checklists or flowcharts

 

Apollo Shoes Casebook Road Map

 

Apollo Shoes casebook rOAD mAP

 

How to Approach the Apollo Shoes Casebook

 

You will be reading and using the Apollo Shoes Casebook. The casebook provides you with supporting documents and information on the fictional company, Apollo Shoes, Inc. Read the casebook introduction for a better understanding of the background and set-up of the casebook.

 

This information is essential to the completion of the following weeks. Keep in mind that you may need information in various folders in the casebook. The casebook is organized sequentially, and should be read in the following order:

 

  • Planning
  • Internal Control
  • Cash
  • Accounts Receivable
  • Inventory
  • Prepaids and Other Assets
  • Fixed Assets
  • Liabilities
  • Payroll
  • Revenue and Expense
  • Wrap-Up

 

Note: The casebook includes assignments in bold text. You are not required to complete the assignments listed in the casebook.

The Apollo Shoes Casebook may be accessed as html or a downloadable Microsoft® Word document.

 

Web-based Version

http://highered(dot)mcgraw-hill(dot)com/sites/0078136644/student_view0/apollo_shoes_case.html

 

Downloadable Version

http://www(dot)mhhe(dot)com/business/accounting/louwers4e/apollo.html

 

Essay Sample Content Preview:
Substantive Procedures for Cash Outflow Irregularities
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Substantive Procedures for Cash Outflow Irregularities
The management of Apollo Shoes Inc. has realized that there is a risk of losing money because of irregularities in cash, payroll, and accounts payable. In order to detect irregularities in these three areas, substantive procedures are necessary. By using the Apollo Shoes Casebook, this paper provides an outline of substantive procedures for detecting irregularities in cash, payroll, and accounts payable audit cycles.
Substantive procedures for detecting irregularities in payroll audit cycles
At Apollo Shoes, personnel management and the payroll accounting cycle comprises transactions which affect the salary and wage accounts and several related accounts. These include (i) supervision – firing and hiring; (ii) payroll accounting – check preparation and related payroll reports; (iii) cost accounting and timekeeping – payroll preparation and cost accounting; (iv) supervision – approval of work. (v) Payroll distribution – actual custody and distribution to staffs; and (vi) cash disbursement (Putra, 2010). The payroll cycle is as follows:
Flow Chart of the payroll cycle




 Payroll Cycle




The main risks in the payroll cycle are overpaying for production or time; paying fictitious personnel; and incorrect accounting for expenses and costs. The following audit procedure is designed to identify fraud in payroll:
Types of fraudSubstantive procedures1Terminated workersSelect a number of files from the personnel records for workers who were dismissed in the current year to find out if each of them got his/her termination pay according to the policy of the company. Examine the payroll records in the successive period to ensure that the individual is no longer being paid2Non-existence workersTrace the selected transactions recorded in the payroll journal to the personnel department to find out if the workers were employed in the payroll period.3Fraudulent hoursReconcile the total hours paid consistent with payroll record with an independent record of the hours the employee worked. Examine proof of proper authorization for payroll given that it is normally easier for the client to prevent this sort of defalcation by sufficient controls than for the auditor to actually detect it (Putra, 2010). 4Unclaimed wagesRequest a surprise payroll payoff whereby every worker has to pick up and sign for her/his check in the presence of the auditor and a supervisor. Investigate those unclaimed wages to find out if an unclaimed check is fraudulent or not.5Wages paid at incorrect rates of payObtaining printout of personnel wage rates and comparing to the HR records
Substantive procedures for detecting irregularities in cash audit cycles
The following substantive procedures are vital in detecting cash irregularities at Apollo Shoe Inc.
ProcedureDescription 1Cash receipt pr...
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