10-21 (OBJECTIVES 19-1 Cing, CPA, in the procedures were planned by Linda whether she does 3. Examine invo invoice file at 1. plant, and equipment. Meliler the control is actually preventing ES 19-1, 19-2, 19-3, 19-5) The following audit procedures were planned b the audit of the acquisition and payment cycle for Cooley Products, Inc. w the acquisitions journal for large and unusual transactions. When the check signer's assistant tant writes "paid" on supporting documents, watch ther she does it after the documents are reviewed and the checks are signed. mine invoices and related shipping documents included in the client's unpaid sice file at the audit report date to determine whether they were recorded in the ropriate accounting period and at the correct amounts. For 20 nontangible acquisitions, select a sample of line items from the acquisitions urnal and trace each to related vendors' invoices. Examine whether each transac- tion appears to be a legitimate expenditure for the client and that each was approved and recorded at the correct amount and date in the journal and charged to the cor- rect account per the chart of accounts. 5 Refoot the acquisitions journal for one month and trace all totals to the general ledger. 6. Send letters to several vendors, including a few for which the recorded accounts payable balance is zero, requesting them to inform us of their balance due from Cooley. Ask the controller to sign the letter. 7. Examine a sample of receiving report numbers and determine whether each one has an initial indicating that it was recorded as an account payable. 8. Select a sample of equipment listed on fixed asset master files and inspect the asset to determine that it exists and to determine its condition. 9. Calculate the ratio of equipment repairs and maintenance to total equipment and compare with previous years. 10. Obtain from the client a written statement that all mortgages payable have been in- cluded in the current period financial statements and have been accurately recorded and that the collateral for each is included in the footnotes. 11. Select a sample of cancelled checks and trace each one to the cash disbursements journal, comparing the name, date, and amount 14. Recalculate the portion of insurance premiums on the client's prepaid insurance schedule that is applicable to future periods. 2. For each procedure, identify the type of evidence being used. u. For each procedure, identify whether it is a substantive analytical procedure, a test of control, a substantive test of transactions, or a test of details of balances. For each test of control or substantive test of transactions, identify the transaction- related audit objective(s) being met. Require For each test of details of balances, identify the balance-related audit objective(s) be- ing met. Chapter 19 / COMPLETING THE TESTS IN THE ACQUISITION AND PAYMEN