Identifying Assertions, Control Activities, and Substantive Procedures Related to Misstatements. During your audit of the December $31,2023,$ financial statements of Bramble Thornburg, Inc., a wholesaler of $$pointy objects,$$ you conduct your testing on the inventory and purchasing cycle. There are several misstatements in the company$$s inventory and accounts payable, but of course you don$$t know that before the audit begins. For each of the misstatements, write the letter in the box for $(1)$ the management assertion violated, $(2)$ a specific internal control procedure the company could implement to prevent this misstatement from occurring in the future, and $(3)$ a specific substantive$$audit procedure the auditor would most likely perform to detect the misstatement. Any selection may be used once, more than once, or not at all. Each box can have only one letter written in it$.$ It is possible that there may be multiple correct responses for some questions.

Table Summary: A table contains three columns titled assertions, control activity or procedure, and substantive audit procedure.

Assertion Control Activity$/$Procedure Substantive Audit Procedure

Existence of Inventory

Segregate authorization from record keeping and custody.

Perform an inventory count.

Completeness of Inventory

Three$-$way match of POs, receiving reports, and vendor invoices.

Confirm Accounts Payable with vendors.

Valuation of Inventory

Pre$-$numbered receiving reports with daily reconciliation of sequence.

Perform purchase cutoff tests.

Classification of Inventory

All purchases require authorization.

Agree purchases to board of directors minutes.

Existence of Accounts Payable

Regular comparisons to budgets are made by management.

Vouch recorded purchases to vendor invoices.

Completeness of Accounts Payable

Daily reconciliations from recorded postings to supporting documents.

Obtain management representation letter.

Classification of Accounts Payable

Pre$-$numbered checks with daily reconciliation of sequence.

Perform substantive analytical procedures.

Payments to suppliers made on December $31,2023,$ were not recorded until January $3,2024.$

Table Summary: A table has $3$ columns; columns $1$ to $3$ are titled Assertion, Control Activity$/$Procedure and Substantive Audit Procedure.

Assertion: Control Activity: Substantive Procedure:

Invoices for purchases were posted to incorrect vendor accounts.

Table Summary: A table has $3$ columns; columns $1$ to $3$ are titled Assertion, Control Activity$/$Procedure and Substantive Audit Procedure.

Assertion: Control Activity: Substantive Procedure:

Inventory is being stolen upon receipt prior to being placed in the company warehouse.

Table Summary: A table has $3$ columns; columns $1$ to $3$ are titled Assertion, Control Activity$/$Procedure and Substantive Audit Procedure.

Assertion: Control Activity: Substantive Procedure:

Inventory costing $$1,254,721$ was shipped to customers on January $3,2024,$ and was recorded as COGS on December $31,2023.$

Table Summary: A table has $3$ columns; columns $1$ to $3$ are titled Assertion, Control Activity$/$Procedure and Substantive Audit Procedure.

Assertion: Control Activity: Substantive Procedure:

Some purchase transactions were not recorded.

Table Summary: A table has $3$ columns; columns $1$ to $3$ are titled Assertion, Control Activity$/$Procedure and Substantive Audit Procedure.

Assertion: Control Activity: Substantive Procedure: