a. For each of the 12 blanks in procedures 1 through 10, identify the most appropriate term.

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Question:

a. For each of the 12 blanks in procedures 1 through 10, identify the most appropriate term. No term can be used more than once.
b. For each of the procedures 1 through 10, identify the type of evidence that is being used. Audit Procedures
1.E - Recompute– (Recalculation)the unit selling price times quantity on the duplicate sales invoice and compare the total to the amount on the duplicate sales invoice.
2.C – Read (Inspect)the long-term debt footnote to determine that all required disclosures are accurately described.
3.J – Observe(Observation)whether the accounts receivable bookkeeper is prohibited from handling cash.
4.D -Compute – (Analytical Procedure)the ratio of cost of goods sold to sales and compare the ratio to previous years.
5.F - Foot(Recalculation)the sales journal and G – Trace (Reperformance)the total to the general ledger.
6.B – Scan – (Reperformance)the sales journal, looking for large and unusual transactions requiring investigation.
7.K – Inquire – (Analytical Procedure)of management whether all accounting employees are required to take annual vacations.
8.I – Count (Inquiry of client)all marketable securities as of the balance sheet date to determine whether they equal the total on the client’s list.
9.L – Confirm (Physical Examination)the balance in the bank account directly with the EastState Bank.
10.A - Examine(Confirmation)a sample of duplicate sales invoices to determine if the controller’s approval is included and H – Compare (Inspection)each duplicate sales invoice to the sales journal for agreement of name and amount.
Terms
a. Examine
b. Scan
c. Read
d. Compute
e. Recompute
f. Foot
g. Trace
h. Compare
i. Count
j. Observe
k. Inquire
l. Confirm
7-40 (OBJECTIVES 7-8, 7-9)
You are the in-charge auditor on the audit of Vandervoort Company and are to review the audit schedule shown on the next page.
a. List the deficiencies in the audit schedule.
The company name is not in full form
There is no proper explanation for the ticker markers
The long-term portion is not clear
There is no due date provided – “paid to date” row is not clear
There is no specific activity indicated
b. For each deficiency, state how the audit schedule could be improved.
The full name of the company should be listed to ensure it is a proper document
All Ticker marks should be completed explained or well known on the audit schedule
Recompute the long-term portion
A specific due date should be given to set expectations and deadlines
Indicate whether each activity was performed or still pending
c. Prepare an improved audit schedule, using an electronic spreadsheet software program. Include an indication of the audit work done as well as the analysis of the client data (instructor’s option).