Erin Riley

ACCT 409-01

Case Study #4

Date

Southeast Shoe Distributor, Inc.: Performance of Tests of Transactions for the Expenditure Cycle

Complete audit procedure 3a listed on audit program E 2. The supporting documents to be examined for

this audit procedure are vouchers, vendor invoices, receiving reports, and purchase orders. Assume you
have

already tested 35 of the selected sample items, observing no misstatements. The documents and
records for

the remaining fve sample items are provided at the following website
www.pearsonhighered.com/beasley.

SSD’s polices only require the generation of receiving reports for purchases of inventory and fxed assets.

Additionally, purchase orders are not required to be generated for recurring services such as utilities and

cleaning. The results from performing audit procedure 3a should be documented in audit schedule E 53.

Document completion of audit procedure 3a in the audit program E 2.

[2] Document your adjusting entries for any observed misstatements that you propose on schedule E
11. Then

update the accounts payable lead schedule on audit schedule E 10. Assume that there was no
systematic

pattern or intent to commit a fraud based on a review and discussion with client personnel concerning

observed misstatements, if any.