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Internal control effectiveness of GPSA

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Added on  2020-03-28

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Introduction: 3 Answer to question 1A: 3 Answer to question 1B: 6 Answer to question 2A: 8 Internal control system: 8 Risk alleviated- 9 Answer to question 2b: 11 Weakness identified in the internal control for sales system and trade receivables of GPSA: 11 Conclusion: 11 References: 12 Introduction: GPSA is an organization that is engaged in distributing, supplying the medical equipment equivalent to medical practitioners. Answer to question 1A: Analysing the accounting heads:

Internal control effectiveness of GPSA

   Added on 2020-03-28

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Running head: AUDITING THEORY AND PRACTICEAuditing Name of the UniversityName of the studentAuthors note
Internal control effectiveness of GPSA_1
1AUDITING THEORY AND PRACTICEExecutive summary:The report is prepared to analyse the internal control effectiveness of GPSA that is engagedin wide variety of activities. Analysis of risks of several accounts are done by using ratioanalysis. Internal control has been evaluated in terms of risk alleviation, text of control andtheir effectiveness. Later part of report deals with division on the weakness of internal controlsystem and steps taken by auditor to reduce such risks.
Internal control effectiveness of GPSA_2
2AUDITING THEORY AND PRACTICETable of ContentsIntroduction:...............................................................................................................................3Answer to question 1A:..............................................................................................................3Answer to question 1B:..............................................................................................................6Answer to question 2A:..............................................................................................................8Internal control system:..............................................................................................................8Risk alleviated-...........................................................................................................................9Answer to question 2b:.............................................................................................................11Weakness identified in the internal control for sales system and trade receivables of GPSA:11Conclusion:..............................................................................................................................11References:...............................................................................................................................12
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3AUDITING THEORY AND PRACTICEIntroduction:GPSA is an organization that is engaged in distributing, supplying the medicalequipment to medical practitioners. One of the long-standing client of MYH is GPA that isrequired to conduct an audit plan for organization. While carrying out task of audit, severalareas of accounts are analysed using analytical procedures. Answer to question 1A:Analysing the accounting heads:AccountsAnalysisAudit riskSteps to reduceaudit riskAccounts receivable-Trade receivable oraccounts receivableis the amount ofmoney that isreceivedbyorganization whilemaking payment orgoods and services.Accounts receivableratio is calculated bymeasuring the salesmade by organizationwithin averagereceivable time.Therefore, creditsales is the accountthat is associatedwith accountsreceivable. From the analysis ofthe given case study,it can be observedthat trade receivableclerk perform all theactivities of tradereceivable account. Itcan be explainedwith the help ofinstance, that medicalequipment returnedby customers, clerknote down the reasonfor return afterchecking theconditions andquality of productand trade receivableclerk raises the creditnote in customerfavour (Gaynor et al.,2015). Moreover,trade receivable clerkalso prepares thebank slip. Tradereceivable clerk doesreceipts fromcustomers andposting in ledger andtherefore, it involvesThere is a highchance that recordingof data in tradereceivable accountsmight involve errors,and therefore highlevel of audit risks. It is certainlypossible that tradereceivable clerkmight record the datainappropriately andthere might be errorin recording orposting of debtoraccount in generalledger (Abernathy etal., 2014). Audit risks can bereducedbysegregating all theaccounts related totrade receivableamong differentemployees.
Internal control effectiveness of GPSA_4

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