QUESTION 3 - (15 MARKS)

Listed below are ten substantive audit procedures:

1)Recheck and recalculate the company-prepared bank reconciliation.

2)Obtain the company's depreciation rates from the financial statements and check they have been applied correctly.

3)Perform accounts receivable confirmations.

4)Review a sample of repairs and maintenance expenditure for the year to ensure that it does not include any items that are capital in nature.

5)Ensure that all contingent liabilities have been included in the notes to the accounts.

6)Send out a bank confirmation letter to confirm a loan taken out by the company during the year.

7)Review all invoices received for one month after the year-end to ensure that they do not relate to the current year.

8)Select a sample of non-current assets to inspect and sight them.

9)Select a sample of invoices and confirm that they have been properly recorded in the sales ledger.

10)Review and recheck the adequacy of the company's allowance for doubtful debts

REQUIRED:

(a)For EACH test above, indicate what Type of Substantive audit procedure to which it relates (analytical review, tests of details of balances or tests of details of transactions).[5 marks]

(b)Give an assertion (ONLY ONE) to which each test relates.[5 marks]

(c)Indicate what Type of Audit Evidence obtained for EACH test.[5 marks]

You may wish to present your answer in the form of the following table:

Test

(a) Type of Substantive Procedure

(b) Financial Statement Assertion

(c) Type of Audit Evidence