Grammar check

Step 2 (step 4 of ACL Appendix )

I set the cutoff date to December 31, 2009 and change the aging periods to 0 and 45 to see do they have any invoice that are over 45 days. The result shows there are four invoices are over 45 days. These four invoice is CUSTNUM 168, 50, 105 and 162. They have total unpaid invoice amount ($79017.13). If the audit chose 45 days as past due date, accounts need to be further analyzed for collectibility. That means accounts have to focus on these four unpaid invoice to figure out the reason cause the invoice past due, and make that pay to customer as soon as possible.

Step 3 (step 5 of ACL Appendix)

I have to determine each customer’s balance, and I created a new file named Customer_Balances. After that, I choose Husky_Credit as the secondary table to join the Customer_Balances, then named this new table as Balances and Credit Limit. Then I created a filter to show there are five customers with balances that exceed their credit limit, and one customer do no have credit limit. The total amount of customer’s exceed is ($793211.84), and the total limit amount of Husky Corp. is ($650,000). Thus, those six customers exceed ($143211.84). This result could make Husky Corp. make attention here, and they should be investigated to determine collectibility, to make sure every customers are in their credit limit.

Step 4 (step 6 of ACL Appendix)

I made a sales cutoff test in this step. Sales cutoff test is really important of a business. Cutoff relates whether transaction have been recorded in correct accounting period. Accountants have to make sure that transactions happening near year- end are recorded in the suitable period. I use Husky_Shipping to be a secondary table to join with Husky_Unpaid, and created a new table named Unpaid with ship number. The result shows three shipments number are bigger than 62050. This result means Husky Corp.’s manager should pay attention on those three customers, to make sure they are in the correct shipping date.

Step 5 (step 7 of ACL Appendix)

This step is an important par for audit, I have to select a PPS(MUS) sample of unpaid invoices and confirm them. First, I enter confidence level of 95, population book value of 4263919.52, materiality of 200000, and expected total errors of 10000. I got a sample size 70, interval size 60,833.33, and maximum tolerable taintings 16.43%. Second, I did a sample records. I set the interval as (60833.33), and set 12345 in the start window. I got a positive confirmations to shows each customers’ sample. Third, I created a filter to determine there are some apparent misstatements that need to be projected to the population. Then, I add a new columns to show the difference between amount and confirmed. Finally, I evaluated these sample results, to check do there have any errors. The results shows there are most likely misstatement of ($71,170.69) and an upper error limit of ($304,871.49). The amount of most likely error does not exceed upper error limit means it is not too bad for Husky Corp., but they have to take care of those errors and make sure do not make same error next time.

Nonstatistical Sampling Option

I did another way to make a sampling, that is nonstatistical sampling option. I entered 0, 50000 in the Free window to make sure the book value of the items over ($50,000). I got amount of (-$22,659.74) and ($4,263,919.52) that what I got in the step 1. This table also shows there are 17 items over ($50,000). After that, I filter out the negative invoice, then sorting the sample in descending order shows that 17 top items and 20 lower items. This process could let me figure out what is the highest and lowest item (>$50,000). Finally, I have to get the book value of the sample items in the lower stratum. I stratify the sample using stratify on amount, and enter 0, 50000 in the free window. I got a lower stratum ($341,660.47) of the book value of the sample items.

Conclusion

5