Design an appropriate audit procedure to test control.

Background information for the continuous case study, Reliable Printers Ltd (RPL), is contained in the Appendix to this book. This case study will be used in each of Chapters 4 to 12 covering a financial report audit and will provide students with the opportunity to see how the issues covered in each chapter can be applied practically to the same company by following RPL through the complete financial report audit process.

4.34 EASY As part of your planning process, you are considering whether you will need to use the services of an expert in the audit of RPL.


Based on the background information contained in the Appendix to this book, explain whether it will be necessary to use the work of an expert in the audit of RPL. LO 4.6

8.27 MEDIUM William Jackson, the CEO of RPL, has requested that the tests of controls only be performed once (due to the disruption caused by audit staff to the work of the staff in the printing and shipping department). In addition, he has requested that the tests of controls occur only during July 2015, as this is traditionally the quietest time of the year for RPL. You expect the audit report to be signed on 15 August 2015.


(a) For each of the manual and IT application control activities identified in question 7.28 in Chapter 7, design an appropriate audit procedure to test that control.

(b) For each of the audit procedures you described in (a), outline the result you would expect if you determined that the control activity was not reliable.

(c) Ignoring considerations of limitation of scope, discuss the effects of William’s requests on the sufficiency and appropriateness of the audit evidence to be gathered.

(d) Review the sample supporting control documentation contained in the Appendix accompanying this book and identify any control deviations that would be revealed by your tests of controls. LO 8.2, 8.3

9.34 EASY Based on a review of the background material contained in the Appendix to this book, you have identified that RPL has two rules for sales to be included in the June period. These rules are:

• Sales must be invoiced in the system by close of business on 27 June as the warehouse is closed from 28–30 June.

• The stock must have been sent to the customer (that is, it must either be on a truck, ship or plane on its way to the customer, or it must already have arrived at the customer; it must no longer be in RPL’s warehouse).


Source: This question was adapted from the Chartered Accountants Program of The Institute of Chartered Accountants in Australia—2012 (3) Audit & Assurance Module

Leave a Reply

Your email address will not be published. Required fields are marked *