Question
The following are audit procedures from different transactioncycles: 1. Examine sales invoices for evidence of internal verification ofprices, quantities, and extensions. 2. Select items from
The following are audit procedures from different transactioncycles:
1. | Examine sales invoices for evidence of internal verification ofprices, quantities, and extensions. |
2. | Select items from the client's perpetual inventory records and examine the items in the company's warehouse. |
3. | Use audit software to foot and cross-foot the cash disbursements journal and trace the balance to the general ledger. |
4. | Select a sample of entries in the acquisitions journal and trace each one to a related vendor's invoice to determine whether one exists. |
5. | Examine documentation for acquisition transactions before and after the balance sheet date to determine whether they are recorded in the proper period. |
6. | Inquire of the credit manager whether each account receivable on the aged trial balance is collectible. |
7. | Compute inventory turnover for each major product and compare with previous years. |
8. | Confirm a sample of notes payable balances, interest rates, and collateral with lenders. |
9. | Use audit software to foot the accounts receivable trial balance and compare the balance with the general ledger. |
a. | For each audit procedure, identify the transaction cycle being audited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
b. | For each audit procedure, identify the type of evidence. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
c. | For each audit procedure, identify whether it is a test of control or a substantive test. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
d. | For each substantive audit procedure, identify whether it is a substantive test oftransactions, a test of details of balances, or a substantive analytical procedure. (Select N/A for those items identified as only a TOC in requirementc.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
e. | For each test of control or substantive test of transactionsprocedure, identify the transaction-related audit objective or objectives being satisfied. (Select N/A for those items identified as a TD of B or SAP in requirement d.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
f. | For each substantive analytical procedure or test of details of balancesprocedure, identify the balance-related audit objective or objectives being satisfied. (Select N/A for those items identified as a ST of T in requirement d. Complete all answers boxes for each audit procedure in the table below. (Abbreviations used: A+P = Acquisition and payment, CA+R = Capital acquisition andrepayment, I+W = Inventory and warehousing, P+P = Payroll and personnel, SAP = substantive analytical procedure, S+C = Sales and collections, ST of T = test oftransactions, SUB = substantive test, TD of B = test of details of balance, TOC = test of control.)
|
Step by Step Solution
3.40 Rating (125 Votes )
There are 3 Steps involved in it
Step: 1
Complete all answers boxes for each audit procedure in the table below Abbreviations ...Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started