Audit Plan

Audit Plan

Our audit team has five members. As the slack business of whole medical industrial and high increased revenue rate of the company, revenue is set as the significant account. Internal auditors were used for the internal control assessment, IT specialists for financial related data accessing, and medical specialists for the medical products classification. The audit was conducted both interim and at the end of the year. Risk and materiality were assessed and set up first, then we performed the control and substantive test.

Test of Control

Our team set up the high control risk set and assessed management assertions related to Cardinal Health revenue account. The test of internal control is related to the revenue occurrence, the revenue valuation, and the entity-level controls.

• Check each process of the revenue cycle is operated by different people. Inquire and observe the related employees whether they have sufficient authorization of their duties and if there is management override existing in the company.
• Select the sample of revenue recorded in the revenue journal and check the supporting document. Check the customer background of each sale to make sure the customer exists and the sale is classified correctly.
• Check the classification of the customers and sales are appropriate. Test for the existence and proper setting of sale approval and revenue recognition.
• Recalculate each revenue item of the income statement for the appropriate revenue classification and the appropriation of reserve account. Check sales and related shipping documents, and make sure the timing and amount of the revenue recognition are appropriate.
• Check each parameter setting for the customer, sales and revenue are appropriate. Test the access of the sales and revenue data.