3. Identify an example of substantive analytical procedures using ADA techniques. a Cash receipts to sales invoice
Question:
3. Identify an example of substantive analytical procedures using ADA techniques.
a Cash receipts to sales invoice matching procedure by comparing 100% of sales invoices to cash receipts for the entire year under audit and period
subsequent to balance sheet date to verify occurrence of sales.
b Comparison of 100% of cash disbursements activity to an approved master vendor list to determine whether payments were made to vendors that had
not been approved through the formal control procedures.
c Trend analysis of sales revenue showing quarterly sales over past four years and sales for each type of product to determine whether there are any
unusual changes in sales from prior years or other trends that might affect risk of material misstatement.
d Predictive model to develop the auditor's expectation of rental revenue for each apartment building held by a real estate company based on apartment
buildings number of units (by size), average monthly marketplace rental rate, and marketplace monthly vacancy rates.
Auditing and Assurance services an integrated approach
ISBN: 978-0134065823
16th edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan