This website uses cookies to ensure you have the best experience. Learn more

Substaaantive Procedures For Outflow Irregularities Essay

1771 words - 8 pages

Substantive Procedures for Cash Outflow Irregularities
To detect irregularities in Apollo Shoes, an efficient audit program for the audit cycles will be needed. Cash, accounts payable, and payroll will be investigated using substantive procedures during the process. Fraudulent activity can damage a company beyond repair so it is very important to design an audit program to discover any signs of fraud or abuse. Knowing how each of the cycles operates will help in the search for fraudulent activity. Each of the audit cycles will be investigated using knowledge of common schemes used for each cycle and using substantive procedures for detecting irregularities for each audit cycle.
Cash Cycle ...view middle of the document...

Confirm if all records are the original records.
Cash Larceny

Determine if the register tape had been altered in any way.
Determine if any accounts have been falsified.
Determine if there are any substantial reversals of transactions that are inconsistent.
Determine is there are any gaps in the sequence of checks on the bank statement. Determine if there are out of sequence checks on the statement.

Accounts Payable Cycle
Substantive procedures for the accounts payable cycle focuses on two major areas of fraud- check tampering and expense reimbursement schemes. Check tampering schemes fall into one of five categories: forged maker schemes (forging the check signer’s name), forged endorsement schemes (forging the name of the intended check recipient), altered payee schemes, concealed check schemes (fraudulent check is presented to signer who signs without proper review), and authorized maker schemes (employee is authorized to sign checks and does so for his own benefit) (Wells, 2005). Expense reimbursement schemes fall into one of four categories: mischaracterized expense reimbursements, overstated expense reimbursements, fictitious expense reimbursements, and multiple reimbursements (Wells, 2005).
Audit procedures to detect each category of fraud are shown below:
Check Tampering- Forged Maker Schemes Reviewed? Notes
Confirm if blank check stock is secured, and who has access to the check stock.
Review the chain of custody for checks that are prepared but not yet signed.
Determine if separation of duties are in place for check preparation, check signing, and checking account reconciliation.
Confirm that signatures on checks match those of authorized signers. Confirm that signatures on check copies match those on signature log.
If a signature plate is used, determine who has access and if usage is logged.

Check Tampering- Forged Endorsement Schemes

Confirm that there is separation of duties between preparing and mailing checks.
Determine if the date a check is mailed is documented.
Review the controls regarding the ability to make changes to the accounts payable system.
Confirm procedures to address, escalate, and log vendor complaints for non-payment. Determine if invoices are marked paid upon disbursement of amount due.
Review procedures to detect duplicate payments. Determine if there is a periodic review of disbursements by payee and amount to detect duplicate disbursements.
Check Tampering- Altered Payee Schemes

Determine if canceled checks are reviewed during the checking account reconciliation. Review payees to confirm that checks are payable to approved vendors (no employee or fictitious vendors).
Confirm the payee section is completed on all checks prior to signing.
Check Tampering- Concealed Check Schemes

Confirm that all check payees are reviewed by the signer prior to signing the checks.
Determine is there are any gaps in the sequence of...

Other Papers Like Substaaantive Procedures for Outflow Irregularities

The "Protected Closure Act, 26 Of 2000". (South African Content)

3059 words - 13 pages unwarranted conduct by their employers and cannot be discriminated against. They may not be victimised or penalised by their employer in any form for having made a disclosure in accordance with any one of the procedures provided by the Act. • The requirements for protection Protection is only established when such disclosure is correctly done in accordance with any one of the procedures provided by the Act. The disclosed information must show that a

Eco 561 Essay

449 words - 2 pages decreasing the price. Throughout this appraisal, they should make sure and confirm the approval procedures, and where it must or should be held to make certain individuals are devoted to consent restrictions. This study business must even check for sufficient constraints on expenses boundaries also the total of individual who approved to create buys. Reexamine Contractors A breakdown for current foundation of merchants could even

Lab Report

942 words - 4 pages EXPERIMENT B Aim : To study level control using 1 – Element (Level) Single Loop PID. Control System : It consists of the following in feedback. LT11 - Level LIC11 - Loop 1, PID 1, of LIC/FIC11 LCY11, LCV11 - Control Valve at Inflow Pipe Special Remarks : LIC/FIC11 is in the 1 – Element position with Loop 1 in A mode. Procedures : 1. Pump P13 was switched OFF as there is no necessity to operate the product flow

Fraud Detection

1091 words - 5 pages We are looking at employee fraud and the identification of the fraud and the classifications. In this case, we are looking at an employee who first paid for a family meal with a company credit card and then submitted the receipt for reimbursement of his business expenses. In my opinion this behavior is fraud. First, the company has already paid for these meals with the co-worker’s family by the employee using his corporate credit card to


352 words - 2 pages share values, norms, standards of behaviour and expectations. QUESTION 12. Give 5 reasons to justify the importance of organizational control. ANSWER 1. Adapt to change and uncertainty: - New suppliers and customers can appear, as well as new technologies and regulations. Control systems help managers anticipate these changes and be prepared for them. 2. Discover irregularities and errors: - There may be problems with quality


353 words - 2 pages : i) To establish proper procedures for collection from debtors and payment to creditors ii) To establish adequate cash floats and minimum cash balances iii) To synchronize cash inflows and outflows Cash Cycle, Cash Turnover and Minimum Operating Cash Cash Cycle (Cash Conversion Cycle) • It is the amount of time a firm’s resources are tied up or it is the period between cash outflow and cash inflow CC

Recognizing and Minimizing Tort and Regulatory Risk

957 words - 4 pages for monitoring and that properly, enforced processes protecting the environment. In one of the inspections was that the irregularities were detected. Those irregularities had to be corrected for so then the company (Alumina Inc.) is not left in dubious reputation in society. And, moreover if a business wants to continue operating should fully comply with the rules, regulations and ordinances imposed by law. The law number 33 U.S.C. §1251 et seq

Internal Controls

1372 words - 6 pages management including the organizations governance, operations, and information systems. Internal auditors assist management through independent audits and consultations to assess and support the company’s system of internal control. The results of an internal audit of an entity’s system of internal control are used by management and have a different intent from procedures performed for attest services. The results of internal control services help

Data Integrity

684 words - 3 pages procedure that uses software and deals with identifying and removing errors and irregularities from data in order to improve or correct the quality of data. Data cleansing procedures and its tools treat and process data quality problems such as misspellings during data entry, missing information or other invalid data and resolve poor data quality in presented case study. When multiple data sources need to be integrated, in data warehouses, such as

Computer Info

731 words - 3 pages impact that each may have on the ability for a business to function with its information systems. the first type of power irregularities are called spikes or surges. these are sudden increases in voltage through power lines. Most systems are protected from these surges quite easily with the use of surge protectors making surges not a big threat. Another form of power irregulation is sags or brownouts. A brownout or sag is a drop in

The Turquand Rule in Law

947 words - 4 pages Company and business processes are complex - knowing what to do, how to apply and follow certain procedures and instructions adds on to the process of complexities. Business law serves as a bridge between business processes and their relationship to the people who enforce and apply them, and ensures that they are followed prudently. For the protection of parties who would be involved in them, internal processes are established in the likeness of

Related Essays

Substantive Procedures For Cash Outflow Irregularities

985 words - 4 pages Substantive Procedures for Cash Outflow Irregularities Substantive Procedures for Cash Outflow Irregularities Apollo Shoes has recognized that there is a risk of loss due to irregularities in cash outflows, accounts payable, and payroll. Substantive procedures for cash outflows, accounts payable, and payroll are needed to detect irregularities in each of these. Failure to implement appropriate procedures will lead to loss

Acc 556 Tutorials / Acc556dotcom Essay

564 words - 3 pages ACC 556 Entire Course ACC 556 Individual Assignment Internal Accountant’s Report to Management ACC 556 Individual Assignment: Procedures in Collecting Forensic Evidence ACC 556 Assignment Substantive Procedures for Cash Outflow Irregularities ACC 556 Learning Team Assignment: Substantive Procedures for Asset Irregularities ACC 556 Individual Assignment: Financial Statement Fraud Schemes ACC 556 Individual Assignment Report on

Guidelines On Concurrent Audit Essay

4748 words - 19 pages and other official from ZO/ H.O. visiting the branch. They may go through the register to evaluate the state of working of the branch and level of compliance of systems and procedures by the branch. In case of any difference of opinion between the branch head and the concurrent auditor the matter should be referred to the Zonal Office under whose control the branch falls. The bank expects the incumbent/ branch head to rectify the irregularities

Ais Sample Midterm Essay

1009 words - 5 pages their anticipated costs. Ideal control procedures which would reduce the risk to practically zero of any undetected errors and irregularities occurring may be impractical for a company because the “ideal” controls expected costs may be larger than their expected benefits. The implementation of controls whose costs are expected to exceed the controls benefits would not contribute to a company’s overall operating efficiency. In these cases