Biltrite bicycles inc (CASE STUDY) By Amardeep Bains Course No. ACC 650M (Auditing Principles) Submitted: 05 Feb, 2012 Module I: Assessment of Inherent Risk Requirement 1. Biltrite bicycles Inc. was incorporated in 1970 and since then it has successfully added many bikes to its production line. The company has experienced steady growth in sales and profitability
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Module 3 1.In going through the plan it is my observation that the plan lacks in testing some areas, specifically the sales revenue and accounts receivable. Via info from the previous module we know there is no pre numbering for bills of lading and no other method to which these are accounted for. There are several things that could result from this weakness. We can conclude that there may be discrepancies in items shipped and items billed to customers. As well because of a lack of numerical reference
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Solutions for the Biltrite Bicycles Inc. Case Module I - Assessment of Inherent Risk..............................................................3 Module II – PRELIMINARY ASSESSMENT OF CONTROL RISK BASED ON AN UNDERSTANDING OF THE DESIGN OF CONTROLS ................17 Module III - Control Testing: Sales Processing................................................29 Module IV - PPS Sampling: Factory Equipment Additions............................31 Module V - Accounts Receivable Aging Analysis.
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BILTRITE BICYCLES INC. CASE STUDY 2 MODULE II 1. Biltrite’s strengths and weaknesses in the internal control Assertion Sale Processing Flowchart: Weakness A. The office was uninformed about the credit approval - Valuation B. Missing customer information and product validation - Valuation C. Invoices were mailed before shipping the goods - Existence And does not matched with bill of lading D. Bill of ladings are not pre numbered - Completeness Strength
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