Background information
B-Star is a theme park based on a popular series of children＊s books. Customers pay a fixed fee to enter the park， where they can participate in a variety of activities such as riding roller-coasters， playing on slides and purchasing themed souvenirs from gift shops.
The park is open all year and has been in operation for the last seven years. It is located in a country which has very little rainfall- the park is open-air so poor weather such as rain results in a significant fall in the number of customers for that day （normally by 50%）。 During the last seven years there have been on average 30 days each year with rain.
B-Star is now very successful； customer numbers are increasing at approximately 15% each year.
Ticket sales
Customers purchase tickets to enter the theme park from ticket offices located outside the park. Tickets are only valid on the day of purchase. Adults and children are charged the same price for admission to the park. Tickets are preprinted and stored in each ticket office.
Tickets are purchased using either cash or credit cards.
Each ticket has a number comprising of two elements 每 two digits relating to the ticket office followed by six digits to identify the ticket. The last six digits are in ascending sequential order.
Cash sales
1. All ticket sales are recorded on a computer showing the amount of each sale and the number of tickets issued. This information is transferred electronically to the accounts office.
2. Cash is collected regularly from each ticket office by two security guards. The cash is then counted by two accounts clerks and banked on a daily basis.
3. The total cash from each ticket office is agreed to the sales information that has been transferred from each office.
4. Total cash received is then recorded in the cash book， and then the general ledger.
Credit card sales
1. Payments by credit cards are authorised online as the customers purchase their tickets.
2. Computers in each ticket office record the sales information which is transferred electronically to the accounts office.
3. Credit card sales are recorded for each credit card company in a receivables ledger.
4. When payment is received from the credit card companies， the accounts clerks agree the total sales values to the amounts received from the credit card companies， less the commission payable to those companies. The receivables ledger is updated with the payments received.
You are now commencing the planning of the annual audit of B-Star. The date is 3 June 2009 and B-Star＊s year end is 30 June 2009.
（i） For the cash sales system of B-Star， identify the risks that could affect the assertion of completeness of sales and cash receipts； （4 marks）
（ii） Discuss the extent to which tests of controls and substantive procedures could be used to confirm the assertion of completeness of income in B-Star. （6 marks）
参考答案：
(i)Risk affecting completeness
–The computer system does not record sales accurately and/or information is lost or transferred incorrectly from the
ticket office computer to the accounts department computer.
–Cash sales are not recorded in the cash book; cash is stolen by the accounts clerks.
–Tickets are issued but no payment is received – that is the sale is not recorded.
–Cash is removed by the ticket office personnel, by the security guards or by the account clerks.
–The account clerks miscount the amount of cash received from a ticket office.
(ii)Use of tests of controls and substantive procedures
Tests of controls
Tests of control are designed to ensure that documented controls are operating effectively. If controls over the
completeness of income were expected to operate correctly, then the auditor would test those controls.
In B-Star, while controls could be in operation, e.g. the account clerks agreeing physical cash to computer summaries,
there is no indication that the control is documented; that is, the computer summary is not signed to show the
comparison has taken place. The auditor could use the test of inquiry – asking the clerks whether the control has been
used, and observation – actually watching the clerks carry out the controls. As noted above though, lack of
documentation of the control does mean relying on tests of control for the assertion completeness of income has limited
value.
Substantive procedures
Substantive procedures include analytical procedures and other procedures.
Analytical procedures include the analysis of significant ratios and trends and subsequent investigation of any trends or
relationships that appear to be abnormal. These procedures can be used effectively in B-Star as an approximation of
income can be obtained from sources other than the cash receipt records.
Other procedures, or tests of detail, are normally used on balance sheet assertions and include obtaining audit evidence
relevant to specific assertions. However, they could be used in B-Star to trace individual transactions through the
sales/cash systems to ensure all ticket sales have been recorded (completeness assertion). The use of other procedures
will be time consuming.