Component
Objective
Key control
Test
Timing
Procedure
Test
Timing

Sales
Validity
Prenumbered bills of landing or other shipping documents are produced and completed in the shipping department.
Select a sample of recorded sales invoices: vouch to supporting shipping documents. Note dates and qualities.
Year end
Inspection
Select a sample of recorded sales invoices and vouch to underlying shipping documents.
Year end

Completeness
The shipping document numerical sequence is checked for missing bills of landing numbers.
Select a sample of shipping documents: scan for missing numbers.
Year end
Inspection
Select a sample of shipping documents and trace to sales invoices.
Year end

Authorization
All credit sales are approved by the credit department prior to shipment.
Select a sample of recorded sales invoices: vouch credit approval.
Year end
Inspection
Select a sample of recorded sales invoices and vouch to underlying shipping documents.
Year end

Financing operations
Accounting
summary journal entries approved before posting
Trace posting to general ledger and proper customer account.
Year end
Inspection
Review accounting policies for revenue recognition and ensure they comply properly disclosed.
Year end

Validity access to the interest invoicing process restricted to appropriate personnel.
Select a sample of recorded interest invoices: vouch to supporting shipping documents. Note dates and qualities.
Year end
Inspection
Select a sample of recorded interest invoices and vouch to underlying shipping documents.
Year end

Accuracy
Interest invoices checked for error in quantities,prices, extensions and totals, freight allowances, and against customers’ orders.
Select a sample of recorded interest invoices: vouch to supporting shipping documents. Note dates and qualities.
Year end
Analysis
Compare revenue dollars and physical quantities with prior-year data and industry economic statistics.
Year end

Cost of goods sold
Accuracy
Standard costs have been used for inventory pricing and reviewed for current applicability.
Review the appropriateness of standard costs, if used, to price inventory issues and cost of goods sold. Review the disposition of variances from standard costs.
Year end
Inspection
Determine whether the accounting costing method used by the client ( such as FIFO, average cost, standard cost) was applied properly.
Year end

Completeness
Inventory custodians have notify inventory records of reductions of inventory.
Trace posting of amounts to general ledger.
Year end
Inspection
Select a sample of recorded cost of sales entries and vouch to supporting documentation.
Year end

Validity
Made additions to inventory quantity records not only on receipt of a