1. Answer these short questions below.

a. How might the auditor effectively use preliminary analytical procedures in the audit of various expense accounts, such as miscellaneous expenses? Give an example of how analytical procedures used in the audit of such accounts.

b. Explain why examining a sample of cash disbursements made after the end of the year is useful in determining the completeness of accounts payable.

c. The auditor often examines some expense accounts, such as legal expenses, in detail even if the account balance is not material. Explain why.

d. Why does the auditor examine travel and entertainment expenses? What would poor controls regarding executive reimbursements say about the tone at the top for purposes of evaluating and reporting on internal control?

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2. Following is a list of substantive tests could be performed in auditing accounts payable cycle. Explain the understanding of the test, what is it used for, how it occurred, what acceptable level should be achieved, and what assertions could be addressed through the test.

a. Cut-off test of purchase and cash disbursement

b. Agree of monthly statements

c. Confirmation of major vendor in accounts payable listing

d. Review long-term purchase commitments

e. Review of unusual journal entries