Solution:

S.No

3
4

8
9

10
 Other audit procedures

The more than a few sources of debit entries or transactions in the general
ledger like cash account, other than transactions as of the cash receipts journal,
be supposed to be investigated, checked, and related/supporting
records/documents should as well be examined.

A surprise examination suppose to be conduct on cash receipts. Before the clerk

of accounts receivable section obtains the cash receipts, the auditor should
make a list of them without the knowledge of clerk. Then the un deposited mail
receipts should be controlled after completion of their preparation for deposit
and after they have been posted to the subsidiary accounts receivable ledger, the
deposit slip amount should be totaled and compared with the remittances and
the list auditor’s list for accuracy, the individual items on the deposit slip should
be compared with postings to the subsidiary accounts receivable ledger. Then
the auditor should supervise the mailing of the deposit to the bank. The auditor
should ask Gutzler Company to ask the bank to send the statement containing
this deposit directly to the auditor.

Postings on or after further deposit slips should be traced to the journal of cash
receipts and the subsidiary accounts receivable ledger. Also entries in the
subsidiary accounts receivable ledger be supposed to be traced to the cash
receipts journal and to the deposit slips.
A proof-of-cash working paper be supposed to be arranged which reconciles
total cash receipts with credits per bank statements. The opening balance and
closing balance reconciliation of the support of cash should be compared with
the analogous reconciliation prepared by the controller.

Review the subsidiary accounts receivable ledger, and confirm accounts that
have abnormal transaction activity, such as consistently late payments.

Make or Arrange a ratio analysis of monthly data or information collections to

total sales of the last month or monthly collections to total accounts receivable
at the opening of the month and evaluate this analysis with a comparable
analysis for the last year.

If Gutzler Company allows consumers to take discounts, the worth and the
discount time or period should be checked.

Meet the client on the date of balance sheet or the next business day to compute
whether there has been an suitable cut off of cash receipts.
Amounts and dates of daily deposits per bank statements should be compared
with entries in the cash receipts journal.

For the periods for which the above audit procedures were not performed and
for a period after the balance sheet date, scan the cash receipts journal and bank
statements for unusual items.
 Reasons for other audit procedures

Because the auditor, by means of standard

measures, checking mainly the cash receipts or
journal, she be supposed to investigate the
validity of each and every other sources of cash
receipts which are not entered/recorded in
these journals.

Because there are no controls to begin with

over cash receipts earlier than the clerk of
accounts receivable obtains the cash, a surprise
test is the only process to decide whether cash
receipts are being reported and deposited
appropriately.

For the reason that there is no separation of

works between accounts receivable and cash
receipts, the accounts receivable clerk may
have been careless in doing their jobs. This
process may also show whether the accounts
receivable employee or clerk may have been
lapping the accounts.
For the reason that of internal control over cash
receipts is weak, the auditor should execute the
overall test or check to make certain that he or
she has investigated all material items during
her detailed tests.

See point 3 above.

Since internal control over cash receipts is in

seven days, the examiner or test may draw
attention to if there is any fraud.

Because there is no separation of duties among

accounts receivable and cash receipts, the
accounts receivable clerk possibly will have
increased discounts that could have been, but
were not, taken or may have been careless in
checking the appropriateness of discounts
taken.

Because internal control over cash receipts is

weak, the auditor is necessary to keep happy
herself that cash receipts are recorded in the
appropriate period.
Because there are no initial controls over cash
receipts before the accounts receivable clerk
obtains the cash, she may have become
careless about prompt depositing of daily
receipts.

Because internal control over cash receipts is

weak, the auditor should perform this review to
ensure that she has investigated all material
items not covered during her other tests.