Question

In: Accounting

For each audit activity, identify the audit procedure. Each activity has one answer, but the audit...

For each audit activity, identify the audit procedure. Each activity has one answer, but the audit procedures can be used more than once.

__ Review lease agreements for capital leases.

__ Select a sample of inventory items from the receiving reports and follow the items to inventory records.

__ Select a sample of fixed asset additions and ask to see the assets.

__ Review the client's calculation of the allowance for doubtful accounts.

__ Compare sales invoice quantities to shipment documentation quantities to verify the client's assertion that this procedure is done by client personnel.

__ Select a sample of entries in the payroll journal and match the employee name, date of payment, and amount of pay to the employee personnel file.

__ Ask production and sales personnel concerning possible obsolete or slow-moving inventory.

__ Watch that an independent person double-checks the payroll wage rates and calculations before checks are printed.

__ Calculate the percentage of sales for salary and wages expense for this year and the prior year for reasonable presentation.

__ Send a form to the bank for the balances of the payroll checking accounts.

Answer Bank

A.

Vouching

B.

Tracing

C.

Scanning

D.

Observation

E.

Confirmation

F.

Inspection of assets

G.

Inquiry

H.

Analytical Procedures

I.

Recalculation

J.

Reperformance

Solutions

Expert Solution

___Review lease agreements for capital leases. Scanning C
__ Select a sample of inventory items from the receiving reports and follow the items to inventory records. Tracing B
__ Select a sample of fixed asset additions and ask to see the assets. Inspection of assets F
__ Review the client's calculation of the allowance for doubtful accounts. Recalculation I
__ Compare sales invoice quantities to shipment documentation quantities to verify the client's assertion that this procedure is done by client personnel. Reperformance J
__ Select a sample of entries in the payroll journal and match the employee name, date of payment, and amount of pay to the employee personnel file. Vouching A
__ Ask production and sales personnel concerning possible obsolete or slow-moving inventory. Inquiry G
__ Watch that an independent person double-checks the payroll wage rates and calculations before checks are printed. Observation D
__ Calculate the percentage of sales for salary and wages expense for this year and the prior year for reasonable presentation. Analytical Procedures H
__ Send a form to the bank for the balances of the payroll checking accounts. Confirmation E
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ekkarill92 answered 4 months ago
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