The following are 11 audit procedures taken from an audit program:
1. Add the supplier balances in the accounts payable master file, and compare the total with the general ledger.
2. Examine vendors’ invoices to verify the ending balance in accounts payable.
3. Compare the balance in employee benefits expense with previous years’. The comparison takes the increase in employee benefits rates into account.
4. Discuss the duties of the cash disbursements bookkeeper with him or her, and observe whether he or she has responsibility for handling cash or preparing the bank reconciliation.
5. Confirm accounts payable balances directly with vendors.
6. Use generalized audit software to run a gap test on the cheques issued during the year. (Print a list of cheque numbers omitted from the normal cheque number sequencing.)
7. Examine the treasurer’s initials on monthly bank reconciliations as an indication of whether they have been reviewed.
8. Examine vendors’ invoices and other documentation in support of recorded transactions in the acquisitions journal.
9. Multiply the commission rate by total sales, and compare the result with commission expense.
10. Examine vendors’ invoices and other supporting documents to determine whether large amounts in the repair and maintenance account should be capitalized.
11. Examine the initials of vendors’ invoices that indicate internal verification of pricing, extending, and footing by a clerk.
REQUIRED
a. Indicate whether each procedure is a test of controls, an analytical procedure, or a test of details of balances.
b. Identify the type of evidence for each procedure.