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In: Accounting

Below are 12 audit procedures. Match each procedure according to one of the 8 appropriate types...

Below are 12 audit procedures. Match each procedure according to one of the 8 appropriate types of audit evidence. - Watch client employees count inventory to determine whether company procedures are being followed. - Count inventory items and record the amount in the audit files. - Trace postings from the sales journal to the general ledger accounts. - Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year. - Obtain information about the client's internal controls by asking questions of client personnel. - Trace column totals from the cash disbursements journal to the general ledger. - Examine a piece of equipment to make sure a recent purchase of equipment was actually received and is in operation. - Review the total of repairs and maintenance for each month to determine whether any month's total was unusually large. - Compare vendor names and amounts on purchase invoices with entries in the purchases journal. - Foot entries in the sales journal to determine whether they were correctly totaled by the client. - Make a surprise count of petty cash to verify that the amount of the petty cash fund is intact. - Obtain a written statement from the client's bank stating the client's year-end balance on deposit. A. Inspection B. Observation C. Recalculation D. Physical Examination E. Inquiries of the client F. Reperformance G. Analytical Procedures H. Confirmation

Expert Solution

A. Inspection

Trace postings from the sales journal to the general ledger accounts

Trace column totals from the cash disbursements journal to the general ledger.

Compare vendor names and amounts on purchase invoices with entries in the purchases journal

B. observation

Watch client employees count inventory to determine whether company procedures are being followed

C. Recalculation

Foot entries in the sales journal to determine whether they were correctly totaled by the client

D. Physical Examination

Examine a piece of equipment to make sure a recent purchase of equipment was actually received and is in operation

Make a surprise count of petty cash to verify that the amount of the petty cash fund is intact.

E. Inquiries of the client

Obtain information about the client's internal controls by asking questions of client personnel.

F. Reperformance

Count inventory items and record the amount in the audit files

G. Analytical Procedures

Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year

Review the total of repairs and maintenance for each month to determine whether any month's total was unusually large

H. confirmation

Obtain a written statement from the client's bank stating the client's year-end balance on deposit

ekkarill92 answered 1 year ago

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