Questions Read the Bradmark Case located in the “Bradmark Case Description” folder and answer the following questions: 1) From the case description and the associated flowcharts, assess Bradmark’s internal controls over its revenue cycle procedures. Bradmark Comprehensive CaseChapter 10 – Expenditure Cycle 1) From the case description and the associated flowcharts, assess Bradmark’s internal controls over its expenditure cycle procedures. From the case description and the flowcharts, Bradmark could still improve its internal control on the expenditure cycle procedures.
The receiving system is not user friendly, which results in voided mistakes and gaps in the receiving report number. This undermines the purpose of the RR number as a control. Additionally, employees have to manually input the data, leading to potential errors and a time-consuming process. To avoid these issues, management should implement a blind document system for receiving orders. This would prevent manual input by the clerk and only require them to input the numbers of received items. Based on the case description, flowchart, file structures, and selected financial data below, specify an ACL™ audit objective for each management assertion presented in the matrix.
For each audit objective, provide a brief description of the ACL test procedure. As an example, the first row in the matrix has been completed for you. The selected Bradmark financial data is Sales: $5,379,996.96, Accounts Receivable: $4,752,257.70, Allowance for Doubtful Accounts (0.2 x Sales): $107,600, Net Accounts Receivable: $4,644,657.70.
Management Assertion Audit Objective Audit Procedures to be Performed Using ACL Existence or Occurrence Verify that the Accounts Receivable represents the amount actually owed to Bradmark. Use ACL to prepare confirmation letters for customers.
Completeness Valuation or Allocation Accuracy To answer parts 3 and 4, you need to install ACL™ Desktop Edition (full educational version) on your computer. To do so, follow the instructions on the CD that came with the textbook.
The ACL Project and ACL files for the Bradmark case are located in the Bradmark Data Folder on the website. Download these files and click on the Bradmark 04 ACL icon to automatically open the case. Perform the ACL tests outlined in step 2 and submit a report describing the audit tests and conclusions, including ACL printouts of test results and the command log. In the matrix format provided below, identify an operational concern related to revenue procedures. Briefly describe the audit objective and ACL procedures to address this concern. Conduct the ACL test and prepare a report with conclusions, documenting it with ACL printouts of test results and the command log. Additionally, address other operational concerns using appropriate audit objectives and procedures with ACL.
