Emily, an experienced auditor, is assigned to conduct the audit of a continuing client, EarthWear Clothier Ltd.
Question:
Emily, an experienced auditor, is assigned to conduct the audit of a continuing client, EarthWear Clothier Ltd. To comply with the auditing standard 'ASA500 Audit Evidence', Emily is planning the following specific audit procedures:
Audit procedures | |
1) | Examining large sales invoices for a period of two days before and after year-end to determine if sales are recorded in the proper period. |
2) | Comparing the current-year gross profit percentage with the gross profit percentage for the last four years. |
3) | Examining a new plastic extrusion machine to ensure that this major acquisition was received. |
4) | Watching the entity's warehouse personnel count the raw materials inventory. |
5) | Obtaining a letter from the entity's attorney indicating that there were no lawsuits in progress against the entity. |
Required: In the LMS space provided
Part A
For each audit procedure listed in the table above, indicate the type of audit procedure it represents.
Part B
For each audit procedure listed in the table, indicate one account balance that is at risk and a key assertion for the account balance that is likely to be affected with brief explanation.
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg