1 = Physical examination, 2 = confirmation, 3 = documentation, 4 = analytical procedures, 5 = inquiries, 6 = reperformance, 7 = observation 1. Review the accounts receivable with the client's credit manager to evaluate their collectability. Stand by the payroll time clock to determine whether any employee punches in more than one time. 2. 3. Inspect inventory items and record the count in the audit files. 4. Obtain a letter from the client's outside attorney (not in-house counsel) addressed to the CPA firm stating that the attorney is not aware of any existing lawsuits. Extend the cost of inventory times the quantity on an inventory listing to test whether it is accurate. 5. 6. 7. Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year. Inspect a piece of equipment to make sure that a major acquisition was actually received and is in operation. Calculate the depreciation expense by asset category to determine if the overall depreciation expense seems reasonable. 8. 9. Obtain a letter from management stating that there are no unrecorded liabilities. 10. Review the total of repairs and maintenance for each month to determine whether any month's total was unusually large