Question

• Your audit firm has just been engaged to replace the prior year auditor at Apple, an international consumer electronics manufacturing company headquartered in the Philadelphia area. Apple has a fiscal year-end of 3/31/19 and produces affordable electronics products that offer the same functionality as brand name products but at a lower price point. Apple has revenues of $50M annually is growing exponentially, with greater than 50% growth in each of the last 5 years.   You have just been assigned as one of the staff auditors to the engagement. Your Manager asks you and the rest of the team to come up with an audit plan for sales and collections for the new engagement. Where do you start??

Engagement Team Exercise

• What information would you ask from the client?
• What other resources would you use to determine your approach to the audit?
• Design your audit plan – what are the phases of the audit that you will perform?
• What risks are you concerned with for the sales and collections cycle?
• List some audit steps/tests you will perform for the sales and collections cycle to address these risks and the expected timing of when you will perform each step.

Answer 1

Sales Audit, where you sit down with your marketing and sales teams and evaluate the components that make up your sales cycle or process. This allows you to see what is in tune, where you might have gaps you need to fill, and what needs to change in order to reach your goals.

Q :What information would you ask from the client?.

Ans:Here are initial questions you should include in your sales Audit

1.How effectively do our internal systems and processes support a high-performance sales organization?

2.How consistently does the sales team follow a sales process? Do we have a documented sales process aligned with our buyer’s decision making process?

3.How efficient is our sales cycle?

4.How does sales leadership impact our sales force? What do they do to help the sales team? What barriers might they be creating? What do they need to do to have a stronger positive impact?

5.What are our current sales capabilities? What do we do well? Where do we fall short?

6.How motivated are our salespeople and what motivates them? Do we provide what they need to do more?

7.How much more new business can we generate? What is this based on? How effective and accurate is our pipeline and forecasting?

8.How effective are we at reaching actual decision makers?

9.Are we hiring the best possible sellers? How productive were our hires in the past 12 months? What criteria do we use to ensure a high probability of success once hired?

10.Does our sales culture support top performance? What’s there and what is missing?

Resources to be used for audit:

1.Sales Ledger

2. Store ledger

3.Marketing Policies

4. Sales Return Entries

5. Accounts Receivable

what are the phases of the audit

1.Evaluate your sales process or road map

2.Review your existing tools and assets

3.Review your existing content and resources

4.Determine the quality of your current leads.

5.Assess your current reporting

6.Evaluate your sales synergy

Risks are you concerned with for the sales and collections cycle

1 Execution Risk: Risks are you concerned with for the sales and collections cycle.

2.Risk from Information System

3. Transactional Risk : Risk involved in entry made in sales transactions

4.Risk by Employees: Wrong information to show of enhanced sales performance

5. Risk associated with Audit evidence