Question

The following are audit procedures from different transaction​ cycles:

1. Examine sales invoices for evidence of internal verification of​ prices, quantities, and extensions.

2. Select items from the​ client's perpetual inventory records and examine the items in the​ company's warehouse.

3. Use audit software to foot and​ cross-foot the cash disbursements journal and trace the balance to the general ledger.

4. Select a sample of entries in the acquisitions journal and trace each one to a related​ vendor's invoice to determine whether one exists.

5. Examine documentation for acquisition transactions before and after the balance sheet date to determine whether they are recorded in the proper period.

6. Inquire of the credit manager whether each account receivable on the aged trial balance is collectible.

7. Compute inventory turnover for each major product and compare with previous years.

8. Confirm a sample of notes payable​ balances, interest​ rates, and collateral with lenders.

9. Use audit software to foot the accounts receivable trial balance and compare the balance with the general ledger.

a. For each audit​ procedure, identify the transaction cycle being audited.

b. For each audit​ procedure, identify the type of evidence.

c. For each audit​ procedure, identify whether it is a test of control or a substantive test.

d. For each substantive audit​ procedure, identify whether it is a substantive test of​ transactions, a test of details of​ balances, or a substantive analytical procedure. ​(Select N/A for those items identified as only a TOC in requirement​ c.)

e. For each test of control or substantive test of transactions​ procedure, identify the​ transaction-related audit objective or objectives being satisfied. ​(Select N/A for those items identified as a TD of B or SAP in requirement​ d.)

f. For each substantive analytical procedure or test of details of balances​ procedure, identify the​ balance-related audit objective or objectives being satisfied. ​(Select N/A for those items identified as a ST of T in requirement​ d.)

Complete all answers boxes for each audit procedure in the table below. ​(Abbreviations used:​ A+P = Acquisition and​ payment, CA+R​ = Capital acquisition and​ repayment, I+W​ = Inventory and​ warehousing, P+P​ = Payroll and​ personnel, SAP​ = substantive analytical​ procedure, S+C​ = Sales and​ collections, ST of T​ = test of​ transactions, SUB​ = substantive​ test, TD of B​ = test of details of​ balance, TOC​ = test of​ control.)

Answer 1