The purpose of substantive testing is to verify the management assertions of account balances and a class of transactions. Consider the following unrelated audit tests, an auditor performed for the audit of the financial statements of a client with a fiscal year end of December 31, 2020.

For each of the four audit procedures listed below, identify the primary management assertion (key take away unit II) being tested, name the specific audit procedure being used (chapter 8), and state the quality of the audit evidence obtained (high, moderate, or low), explaining why the evidence is the quality level you specify. (see course notes and chapter 8)

(1 mark for the correct management assertion, 1 mark for the correct type of procedure,1 mark for identifying the quality of evidence as high, moderate or low, 1 mark for explaining the recommended quality of evidence). (Only identify the main management assertion and the main type of procedure)

Organize your answer with these headings:

Management assertion Audit procedure Quality of audit evidence

a.  Sent positive confirmations of selected invoices for a select sample of accounts receivable obtained from the AR sub-ledger.

b.  Recalculated the amortization expense for all assets outstanding at year-end obtained from the unaudited capital asset register.

c.  For accounts payable with zero balances at the year-end date, traced the dollar amount from the AP sub-ledger to the vendor statement.

Answer rating: 100% (QA)

Solution a Vouched additions to the property plant and equipment subledger to the vendor invoice b C... View the full answer