Individual AssignmentThis is a 3 -part assignmentStudent Name :_____________________________________Part 1 Case 5: Test of Controls: The Revenue and Cash Receipts CycleInstructions: Answer all the questions that appear below (and also in Exhibit 5-1) regarding accounts receivable control procedures. Use this case and Exhibits 4-4 and 4-5 to complete this questionnaire. Case 5 - Exercise 1Abernethy and ChapmanInternal Control Questionnaire - Accounts ReceivableClient: The Lakeside CompanyPrepared by:Date:QuestionsComments on Current SystemSignificanceSuggestions1Does an independent party on a regular basis reconcile the subsidiary ledger?2Are appropriate, established criteria in place for writing off doubtful accounts?3Are accounts to be written off properly reviewed and authorized by an independent party?4Is an appropriate follow up made on accounts that are written off?5Does the company periodically re-evaluate the method in use for estimating bad accounts?6Are customers billed regularly by a party separate from the subsidiary ledger?7Is an independent verification made of complaints from customers concerning their bills?8Was the company’s policy of granting credit changed over the past year?9Can a credit sale possibly be made without prior credit approval?10Are credit files complete and periodically reviewed?11Are invoices verified as to agreement with goods shipped and price of goods?12Are extensions and footing recalculated?13Are cash discounts recomputed and verified as to actual days?14Can a sale possibly be made and goods shipped without an invoice being recorded or mailed?Part 2 Case 5: Test of Controls: The Revenue and Cash Receipts CycleInstructions: Exhibit 5-2 is a portion of the audit program that Mitchell designed to test the operating efficiency of controls in the revenue and cash receipts cycle. For each individual test that appears in Exhibit 5-2, indicate the anticipated results if the control procedure is working properly. Also, if the control is not functioning properly, what potential problems exist? Indicate your responses in the table provided below.Case 5 - Exercise 2 Abernethy and ChapmanInternal Control EvaluationClient:Prepared by:Date:Exhibit 5-2 is a portion of the audit program that Mitchell designed to test the operating efficiency of controls in the revenue and cash receipts cycle. For each individual test, indicate the anticipated results if the control procedure is working properly. Also, if the control is not functioning properly, list the potential problems that exist. Use the following format for your response:StepAnticipated ResultsPotential Problem(s)1-AThe total listed on the sales invoice should agree with the total on the sales invoice slip. In addition, evidence should be present to indicate that a Lakeside employee has already made this same comparison.If the invoices do not agree, the possibility is raised that fictitious or misstated sales are being recorded. Lack of tangible evidence (e.g., initials) that the matching procedure has been carried out would indicate that the employees are not complying with the requirements of the system.1-B1-C1-D1-E1-F1-G1-H1-I2-A2-B2-C34Part 3Case 6: Audit Procedures and Audit Documentation: Testing the Inventory Purchasing SystemRespond fully to the questions below:What control activities are evident in Lakeside’s inventory procurement system? For each activity, indicate its purpose by reference to management assertions. From the auditor’s perspective, what is the significance of Lakeside acquiring virtually all merchandise from Cypress Products?In the first set of testing procedures listed in this case, the auditor begins with canceled checks and then seeks supporting documentation. In the second, receiving reports are selected, and the recording of subsequent events is traced through the system. Which of the management assertions are being corroborated by each test? Why are the tests performed in these manners?The case mentions some possible purchasing and payment problems. Given the company’s controls, is it possible that Lakeside might pay for goods that were never received? Is it possible that the company might fail to pay for inventory that has been received? Be specific with your answer, describing in detail the nature of the transaction that may result in the error.What is the purpose of an audit document such as the example presented in Exhibit 6-1? Does the audit document belong to Lakeside or to Abernethy and Chapman? Why?

1.Case papers should address the key issues that pertain to the financial strategy and then make clear recommendations with as much support as possible.2.Papers should be no more than three double spaced pages (not including exhibits) and include a cover page with your name, the date, the course number, and the title of the assignment (case name).3.Papers should be organized into specific sections.For example, Background, Key Issues, Risk, Recommendations, and Detailed Support for Any Recommendations.