Porter Gale Corporation is a publicly-traded company. New-hire is completing an audit at their headquarters and will con

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Porter Gale Corporation is a publicly-traded company. New-hire
is completing an audit at their headquarters and will conduct a
test of controls over revenue recognition using attributes
sampling. A new hire will use the results as part of the evidence
on which to base your opinion on internal controls and to determine
what substantive auditing procedures you should perform on revenue
and accounts receivable. The test of controls involves the
following:
Plan to use a sample size of 100. (Note that this sample size is
just rounded up from the sample size of 93 that would have been
obtained from the appropriate table). The results of the testing
are as shown:
1. All sales over $10,000 must be approved by the sales manager
by initialing the customer’s order.
1. There were only twenty-five sales over $10,000 in the sample.
So, the auditor randomly collects an additional seventy-five sales
transactions that were over $10,000. All were approved by the sales
manager.
2. Credit must be approved by the credit department prior to
shipment and noted on the customer’s order.
2. Three sales were recorded without evidence of credit
approval. The sales manager said she had approved the sales. No
customer orders could be found for three of the other sampled
items.
3. Sales are recorded only when a shipping document is forwarded
to the billing department.
3. No shipping document could be found for four of the sampled
items.
4. The date of recording the sale must correspond to the date on
the shipping document.
4. Five sales were recorded prior to the date of shipment. Your
follow-up indicates that a temporary employee worked for the last
two months of the fiscal year and was unaware of this
requirement.
5. All prices are obtained from the current price list that is
periodically updated by the sales manager.
5. All prices agreed with the appropriate price list.
6. The shipping department is not to ship products without first
receiving an approved customer’s order.
6. No customer orders could be found for two sample items as
indicated in Step 2
7. The billing department compares the quantity billed with the
customer’s order.
7. Five billed quantities were for more than the customer order.
Four of these took place near year-end. In addition, there was no
customer order for the three items indicated in Step 2.
Required: Create a table (in Excel, in a format
like a table shown in the assignment) with an analysis of the audit
and include an explanation for each question below. Column
labels are included below: