PINNACLE MANUFACTURINGPART 6

Part A
Client:
Pinnacle Manufacturing
Audit Area:
Tests of Controls and Substantive Test of Transactions Acquisitions.
Define the Objective(s):
Examine vendors' invoices, receiving reports, purchase orders.
Define the population precisely (including stratification, if any):
Vouchers for the year of 2011- First voucher number : 6734. Last voucher number: 33722.
Define the sampling unit, organization of population items, and random
selection procedures:
Recorded sequentially in the acquisitions journal
random number in the electronic spreadsheet
Part B
Client:
Pinnacle Manufacturing
Audit Area:
Tests of Controls and Substantive Test of TransactionsCash Disbursements
Define the Objective(s):
Verify internal controls of cancelled checks and to trace the cancelled check from the related cash
disbursement journal entry record; required check information; compare deposit receipts to the
bank statement.

Define the population precisely (including stratification, if any):

The population as of 12/31/10, the number of disbursements is 23, 661 totaling $87,280,031.

Define the sampling unit, organization of population items, and random

selection procedures:
Cancelled checks are traced to posting in the general ledger; bank statement; random number
table is used.

Part C
Sales
Sales Returns and Allowances
Cost of Sales*
Gross Profit

150,918,731
181,103
109,284,780
41,452,848

148,764,555
178,518
106,255,499
42,330,538

144,860,245
173,832
101,988,165
42,698,248

OPERATING EXPENSES-Allocated
Salaries-Management
Salaries-Office
Bad debts
Depreciation expense
Wages-Mechanics
Wages-Warehouse
Payroll benefits
Rent- Warehouse
Legal service
Fuel
Total operating expenses-Direct
Total Operating Expenses
Operating Income
Other Expense-Interest
Income Before Taxes
Federal Income Taxes
Net Income

2,281,266
315,169
841,699
5,336,783
1,113,539
4,891,065
2,657,889
802,855
396,016
286,547
27,078,608
37,177,738
4,275,110
2,181,948
2,093,162
883,437
1,209,725

2,387,993
296,681
1,034,060
4,641,982
1,339,626
5,340,271
2,937,730
764,346
190,540
341,192
28,170,145
38,133,969
4,196,569
2,299,217
1,897,352
858,941
1,038,411

2,295,081
306,856
992,094
4,367,565
1,333,411
5,473,249
2,894,300
758,345
152,238
279,512
27,707,646
37,241,108
5,457,140
2,397,953
3,059,187
1,341,536
1,717,651

Part A Duplicate
Client: Pinnacle Manufacturing

Audit Area: Tests of Controls and Substantive Test of TransactionsAcquisitions.

Define the Objective(s): Examine vendors' invoices, receiving reports, purchase orders, and
other related documents to determine whether the system has functioned as intended and as
described in the audit program.
Define the population precisely (including stratification, if any): Vouchers from
1/1/2011 to 10/31/2011. First voucher number 6734. Last voucher number 33722.
Define the sampling unit, organization of population items, and random
selection procedures: Voucher number, recorded sequentially in the acquisitions journal;
random number function in electronic spreadsheet.

Part B Duplicate
Client:
Pinnacle Manufacturing
Audit Area:
Tests of Controls and Substantive Test of TransactionsCash Disbursements
Define the Objective(s):
Examine cancelled checks and other related documents to determine whether the system has
functioned as intended and as described in the audit program.
Define the population precisely (including stratification, if any):
Cancelled checks from 2011. First check number - 8326. Last check number - 33268.
Define the sampling unit, organization of population items, and random
selection procedures:
Check number, recorded sequentially in the cash disbursements journal; random number function
in electronic spreadsheet.
Part C Duplicate
Population = voucher numbers 4614 to 31612
Sample size = 50

Random Selection: In my auditing of conducting a trace and vouch analysis on

the voucher numbers, my testing produced the vouchers listed below to trace.
232415988 306821958829298
2053219059265371434912379
2575515956281051169021854
288114948 16560283165847
9458 11764132052694415429
24375226645573 5786 23439
5636 31534258891008711694
197557119 107782182111845
14976153889842 219359481
5629 16185136581424610698

Sample Data
Random Selection
of 50 Sample
Voucher Numbers
4614-31612
9801
8147
13439
14638
16520
11540
21992
18408
18506
28492

23109
7131
17462
31479
10101
5412

15411
5569
30892
19670
15550
18164
17219
9105
30083
22363

29773
20778
8687
31562
15921
25882

7751
24405
29059
27910
25581
8656

15638
24856
19623
4961
22405
23531
23574
12833
18139
18831

19635
8335
14071
27467
28759
11013

13129
8977
23121
23934
16219
18689
9696
14180
15132
21001

26634
13958
20168
6120
15232
14088

24617
29603
20115
11684
30040
5811
11532
14904
4886
9435

7400
7946
8192
15734

10172
8062
14667
5870

22972
18670
6972
5844

14470
6218
14850
19262

6165
29524
24547
21096