（a) （i) Identify and explain FOUR financial statement assertions relevant to classes of tr

(a) Assertions for classes of transactions and eventsOccurrence
The transactions and events that have been recorded have actually occurred and pertain to the entity.Substantive procedures
Select a sample of sales transactions recorded in the sales day book; agree the details back to a goods despatched note (GDN) and customer order.Review the monthly breakdown of sales per key product, compare to the prior year and budget and investigate any significant differences.Completeness
All transactions and events that should have been recorded have been recorded.Substantive procedures
Select a sample of GDNs raised during the year; agree to the sales invoice and that they are recorded in the sales day book.Review the total amount of sales, compare to the prior year and budget and investigate any significant differences.Accuracy
The amounts and other data relating to recorded transactions and events have been recorded appropriately.Substantive procedures
Select a sample of sales invoices and recalculate that the totals and calculation of sales tax are correct.For a sample of sales invoices, confirm the sales price stated agrees to the authorised price list.Cut-off
Transactions and events have been recorded in the correct accounting period.Substantive procedures
Select a sample of pre and post year-end GDNs and agree that the sale is recorded in the correct period’s sales day books.Review the post year-end sales returns and agree if they relate to pre year-end sales that the revenue has been correctly removed from the sales day book.Classification
Transactions and events have been recorded in the proper accounts. Substantive procedures
Agree for a sample of sales invoices that they have been correctly recorded within revenue nominal account codes and included within revenue in the financial statements.(b)
(i) Substantive procedures for supplier statement reconciliations– Select a representative sample of year-end supplier statements and agree the balance to the purchase ledger of Hawthorn. If the balance agrees, then no further work is required.– Where differences occur due to invoices in transit, confirm from goods received notes (GRN) whether the receipt of goods was pre year end, if so confirm that this receipt is included in year-end accruals.– Where differences occur due to cash in transit from Hawthorn to the supplier, confirm from the cashbook and bank statements that the cash was sent pre year end.– Discuss any further adjusting items with the purchase ledger supervisor to understand the nature of the reconciling item, and whether it has been correctly accounted for.(ii) Substantive procedures for bank reconciliation– Obtain Hawthorn’s bank account reconciliation and cast to check the additions to ensure arithmetical accuracy.– Agree the balance per the bank reconciliation to an original year-end bank statement and to the bank confirmation letter.– Agree the reconciliation’s balance per the cash book to the year-end cash book. – Trace all the outstanding lodgements to the pre year-end cash book, post year-end bank statement and also to paying-in-book pre year end.– Trace all unpresented cheques through to a pre year-end cash book and post year-end statement. For any unusual amounts or significant delays, obtain explanations from management.– Examine any old unpresented cheques to assess if they need to be written back into the purchase ledger as they are no longer valid to be presented.(iii) Substantive procedures for receivables– Review the aged receivable ledger to identify any slow moving or old receivable balances, discuss the status of these balances with the credit controller to assess whether they are likely to pay.– Select a significant sample of receivables and review whether there are any after date cash receipts, ensure that a sample of slow moving/old receivable balances is also selected.– Review customer correspondence to identify any balances which are in dispute or unlikely to be paid.– Review board minutes to identify whether there are any significant concerns in relation to payments by customers.– Calculate average receivable days and compare this to prior year, investigate any significant differences.– Inspect post year-end sales returns/credit notes and consider whether an additional allowance against receivables is required.– Select a sample of goods despatched notes (GDN) before and just after the year end and follow through to the sales ledger to ensure they are recorded in the correct accounting period.– Select a sample of year-end receivable balances and agree back to valid supporting documentation of GDN and sales order to ensure existence.