Tests of Control Exceptions with IDEA.

You have identified relevant controls for several assertions within the revenue cycle, and you must use IDEA to perform several tests of controls.

Required:

a. ELM has a policy of using prenumbered customer order forms to help control for the completeness assertion. Inquiry of the client determined that order forms 17001–17405 were used during the quarter. Using IDEA, create a schedule of missing customer order forms. How many missing order forms were there?

b. Each customer order should be entered into the system once and only once. Using IDEA, search for duplicate customer order forms. What is the total dollar amount of duplicate orders?

c. To assist with the collectability of accounts receivable, ELM has a policy that all customer orders must be approved and marked as approved in the order system. Create a schedule of exceptions to this policy.

d. To ensure the posting of sales in a timely manner and increase the collectability of accounts receivable, ELM has a policy to always invoice customers within two days of shipping. Create a schedule of exceptions to the invoicing policy.

e. Draft a memo outlining the findings of your tests of controls. Address not only your findings, but also the effects of your findings on your assessment of control risk related to specific financial statement assertions.