Accounting

Running Head: Accounting
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Purchase cut-off procedure
In this analysis, I will provide an intense review on the record of purchases that were undertaken during the current transaction period. The procedure ascertains the recording of all the transactions undertaken during the current period. Lack of such undertaking will provide the Company with the likelihood of most of the transactions being unrecorded. In most cases where the Company closes its accounts before the year end, the risks of vendor`s invoices becoming unrecorded are high. The procedure to be followed in order to ascertain the correctness of the records presented by Golden Star Pate Ltd on purchase of stock includes;
Ensuring that the year end goods received, that is notes payables and the related purchase invoices are correctly treated in the current period of occurrence. This is done by verification of notes payables through the comparison of the serial numbers of the last received stock and the serial number of the last stock check issued.
Examination of the presence of unmatched invoices will be put into consideration. I will analyze the details of stock dispatch from the distributor and those of receipt by the Company and also ascertain the dates with which the transactions took place. I will also ascertain the unrecorded invoice form the distributor. Based on risk assessment ands materiality, examination of subsequent payments in the case of agency obligations is of consequent importance. This entails comparison of the current year-end and prior year-end balances in order to establish any unusual items.

Finally, I will take a sample of goods received from the distributor and the goods dispatched just after the year end and verify its invoice serial numbers. This will ensure that the related stock was not included in the count in the case of goods received for the current period.
Purchase ledger balances
This provides an inherent clarification on the balances recorded on the books of account. The Internal Control System ensures that the purchases are recorded in accordance to the transactions that occurred in the current period. This will minimize any consequent loss and damage to the company`s reputation as the information provided in the financial statements will not be a representation of the true and fair view of the Company`s records.
In order to determine that the purchases amount recorded are in agreement with invoices and supporting documents recorded and in the current transaction period, I would follow the following procedure; Review the accounts payables maturity, testing the clerical accuracy of the accounts posted in the invoices and also reconciling the general ledger to determine any inadequacies. I will sample out the selected stock items to the vendors` invoices, verify the purchase orders copy, goods receipt and other documentation should be verified. Nex...