FAR EAST HORIZON

CORPORATION
Presentation of Financial Statements
 Company
Information
 Far East Horizon Corp
TRIAL BALANCE (2018)
 Far East Horizon Corp
TRIAL BALANCE (2019)
 Far East Horizon Corp.
GENERAL LEDGER (2019)
 Far East Horizon Corp.
GENERAL LEDGER (2018)
 Far East Horizon Corp
SUBSIDIARY LEDGER ( 2018-2019 )
 Far East Horizon Corp
SUBSIDIARY LEDGER ( 2018-2019 )
 Far East Horizon Corp.
SUBSIDIARY LEDGER ( 2018-2019 )
 Far East Horizon Corp
SUBSIDIARY LEDGER ( 2018-2019 )
 Far East Horizon Corp
SUBSIDIARY LEDGER ( 2018-2019 )
 Far East Horizon Corp
SUBSIDIARY LEDGER ( 2018-2019 )
 Far East Horizon Corp
Income Statement (2018-2019)
 Far East Horizon Corp
Income Statement (2018-2019)
 Far East Horizon Corp
Income Statement (2017-2018)
 Far East Horizon Corp
Income Statement (2017-2018)
 Far East Horizon Corp
Balance Sheet (2018-2019)
CASH FLOW STATEMENT (2018)
 ANALYTICAL
PROCEDURES
15.43% increase in Cash and Cash Equivalent
Due to increase of collection.
32.32% increase in Accounts Receivables
Due to increase of Sales on Account.
24.59% increase in Inventory
Due to increase of Production.
25.03% increase in Accounts Payable
Due to increase of New Purchases for production.
5.5% increase in Equity
Due to increase of Paid-in Capital.
305.33% increase in Sales
Due to increase of Consumer Demands.
300.74% increase in Cost of Goods Sold
Due to increase of purchasing Raw Materials for Production.
300.36% increase in Overheads
Due to increase of expenses.
 TESTS OF
CONTROLS
 SPECIFIC CONTROL COMMON CONTROL POLICIES TESTS OF CONTROLS
OBJECTIVES AND & PROCEDURES
ASSERTIONS

Occurrence ● Select a sample of of sales

● Evidence of quantities transactions from sales
shipped reconciled to journals
quantities invoiced ● Inspect reconciliation of
● Monthly statements mailed shipments to invoices
to the customers and ● Observe mailing of monthly
queries followed up statements & enquire about
follow-up of queries

Completeness ● Shipping documents and ● Review the evidence of

sales invoices pre- control of accounting for
numbered and sequence for numerical sequence of
● Quantities shipped shipping documents
periodically reconciled to ● Inspect evidence of client’s
quantities invoiced reconciliations of shipments
to invoices
 SPECIFIC CONTROL COMMON CONTROL
OBJECTIVES AND POLICIES & PROCEDURES
ASSERTIONS
Completeness ● Shipments checked for
shipping documents
Accuracy ● Recomputation and
comparison of details to
supporting documents
● Monthly statements mailed
to customers
● Authorizations and
independent follow up of
correspondence with
customers
● Supervisory review and
approval of summarization
and posting
TESTS OF CONTROLS
● Observe checking of
shipments or inspect
selected shipments
● Select a sample of
transactions from the sales
journal and review
evidence that comparison
with supporting
documentation undertaken
and that prices traced to
approved list and
extensions and footings
recomputed
● Observe mailing of monthly
statements
 SPECIFIC CONTROL COMMON CONTROL TESTS OF CONTROLS
OBJECTIVES AND POLICIES & PROCEDURES
ASSERTIONS

Accuracy ● Programmed controls in ● Review evidence of follow-

processing sales to identify up of correspondence with
unusual amounts with customers
● Test data techniques to
test specific programmed
controls

Cut-Off ● Written procedures ● Observe or ascertain that

detailing the last sales written procedures followed
(and related costs of sales) and independen check
recorded before balance carried carried out.
date, and first sale (and
related costs of sales) of
next period recorded in
next period
 SPECIFIC CONTROL COMMON CONTROL TESTS OF CONTROLS
OBJECTIVES AND POLICIES & PROCEDURES
ASSERTIONS

Classification ● Appropriate account ● Review approval of of and

codings on sales account codings for sales,
documents including related party
sales
SUBSTANTIVE
TESTS
 Substantive Audit Tests for SALES
AUDIT TESTS TECHNIQUE ASSERTIONS

Agree sales journal entries to Vouching Existence or occurrence

shipping documents

Trace shipping documents to Tracing Completeness

sales invoices and entries in
sales journal

Perform cut off tests for sales Vouching Existence or occurrence

and shipping Tracing Completeness

Recompute information on sales Reperformance Valuation

invoice

Scan sales journal for large Inspection Presentation and Disclosure

unusual items

Apply analytical procedures Analytical All

MATERIALITY
Overall materiality is based on needs and
expectations of the users
QUALITATIVE CONSIDERATIONS
DOCUMENTATION
DOCUMENTATION