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

Solutions

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

Next > < Previous

Related Solutions

Read the listing of substantive procedures for debt and match each with its appropriate primary audit...

Read the listing of substantive procedures for debt and match each with its appropriate primary audit objective. 1.Evaluating whether debt provisions and covenants have been met. 2.Examining copies of the actual signed note payable to determine the correct dollar amount of the liability 3.Confirming debt 4. Performing analytical procedures on debt and related accounts to ensure that all debt is properly included in the period under audit and that some notes have not been omitted. 5.Vouching borrowing and repayment terms...

for each of the following audit procedures, (a) state the type of audit procedure used (e.g.,...

for each of the following audit procedures, (a) state the type of audit procedure used (e.g., observation), (b) state the general audit objective(s) tested by the procedure (no additional explanation is required), and (c) evaluate and briefly explain the reliability of the evidence produced by the audit procedure. Select a sample of the audit client’s suppliers’ invoices to see if these transactions have been recorded in the accounting records. Write to the audit client’s banks to ask for financial year-end...

Several specific audit procedures are listed below. For each item, identify the type of procedure listed...

Several specific audit procedures are listed below. For each item, identify the type of procedure listed and which of the assertions is being addressed by the procedure. (a) Examine a list of investment securities held by the client’s trustee. (b) For a sample of transactions posted to the client’s accounts payable subsidiary ledger, examine supporting purchase orders and receiving reports agreeing amounts and information. (c) Send a written request to the client’s customer for verification of the amount owed to...

Potential Audit Procedure Failures. For each of the general audit procedures of; Recalculation, Observation, Confirmation (accounts...

Potential Audit Procedure Failures. For each of the general audit procedures of; Recalculation, Observation, Confirmation (accounts receivable, securities or other assets), Injuiry, Inspection of internal domuments, reperformance and analystical procedures. Discuss one way the procedure can be misapplied or the auditors could be misled in such a way to render the work (audit evidence) misleading or irrelevent. Give examples

For each of the audit procedures listed in the table below, select the type of audit...

For each of the audit procedures listed in the table below, select the type of audit test the procedure represents, type of evidence the procedure collect, and the primary assertion that the procedure supports, using the lists indicate the corresponding letter in the appropriate box. Type of test Type of evidence Assertion A- Analytical procedure A- Inspections of tangible assets A- Existence/Occurrence B- Test of Control B- Confirmation B- Completeness C- Test of Transactions C- Inspection of documents and records...

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. - A. B. C. D. E. F. G. H. I. J. Review lease agreements for capital leases. - A. B. C. D. ...

Each scenario below practices one of the 12 Principles of Economics. Match the principles to the...

Each scenario below practices one of the 12 Principles of Economics. Match the principles to the appropriate scenario listed and justify your answer. A principle will only be used once, and not all principles are used. The 12 Principles of Economics: People must make choices because resources are scarce. The opportunity cost of an item — what you must give up in order to get it — is its true cost. “How much” decisions require making trade-offs at the margin:...

What are the procedures in auditing cash? Which audit objective does each procedure relate to?

1. Enumerate, and explain, each audit procedure classified according to purpose and according to nature. 2....

1. Enumerate, and explain, each audit procedure classified according to purpose and according to nature. 2. Define external confirmation. Give examples of situations involving external confirmation. 3.What are the different forms of confirmation request? What are the situations where each type may be used? 4. Explain the typical approach followed in performing analytical procedures. 5. Define substantive tests. What are the different types of substantive tests? 6. Differentiate fraud from error.

PART A Every audit procedure obtains one or more of the following types of ...

PART A Every audit procedure obtains one or more of the following types of evidence: PHYSICAL EXAMINATION CONFIRMATION INSPECTION /DOCUMENTATION ANALYTICAL PROCEDURES INQUIRES OF CLIENT RECALCULATION REPERFORMANCE OBSERVATION For each of the following audit procedures, classify each according to the eight types of audit evidence above Inquire of management whether there is any obsolete inventory on hand at the balance sheet date Examine a sample of vendor’s invoices to determine whether the goods or services received are...

Subjects