Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
We have audited the accompanying financial statements of ABC Glass and Aluminum. Which
compromise the Balance Sheet as of December 31, 2020, Ledger, the Cash Flow Statement for the
year ended and a summary of the significant accounting policies and other explanatory information.
The audit process took 3 days to be accomplished.
We, auditors, used the one by one process of investigation, scanned through the necessary
documents in order to attest the transparency and faithful representation of financial data and
policies.
With thorough investigation and study, following are the focal points necessary for correction due to
errors, unjust disclosures and misstatements.
1. NO OR # FOR SALES INVOICES
- Could give the business a hard time locating future errors.
2. NO TIN #
- Could create confusion on whether the business is a VAT-registered one or not.
3. FEBRUARY - DECEMBER JOURNAL ENTRIES (DR CASH, CR SALES and output tax) WHILE JAN
JOURNAL ENTRIES (DR CASH, CR SALES) SHOWS INCONSISTENCY WITH POSTING
4. INCONSISTENT VAT FORMULA (JANUARY VAT= SALES X 12% WHILE FEBRUARY - DECEMBER
SALES ÷ 1.12 = VATABLE SALES X 12% FOR VAT)
- January computations used a process that is not applicable with VAT included sales.
5. ERROR IN CASH - NO RECEIPTS/INVOICES TO SUPPORT THE SALE TRANSACTION FOR THE MONTH
OF JANUARY, THEREFORE CASH INFLOW RECORDED IN THE LEDGER/JOURNAL WAS NOT FULLY
SUPPORTED BY ANY TRANSACTIONS.
6. NO PURCHASES RECEIPTS FOR THE WHOLE YEAR
- There are no Purchase Receipts presented for the whole year to justify or support any detail in
the amount and entries recorded and posted in their Ledger and journal transactions. Only
journal entries are given for the year. The entries stated 84 receipts but there is no supporting
documents that can justify their purchases.
7. THERE ARE ONLY 300 SALES INVOICES, BUT RECORD IN JOURNAL AND LEDGER SHOWS 600
SALES TRANSACTIONS
- The matching Principle was ignored and not followed.
