Question

In: Accounting

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 the client company.

(d) Examine the dealer’s invoice for a new vehicle reported on the client’s fixed assets subsidiary ledger.

(e) Ask the client’s credit manager about the collectibility of certain customer account balances.

(f) Watch the client’s process of conducting the physical inventory counts.

(g) Compute interest expense on notes payable.

(h) Verify the client’s bank reconciliation by testing the proper inclusion of all reconciling items.

(i) Send a written request to the client’s attorney for verification of legal matters.

(j) Compare key ratios for the current year with the same ratio results for the prior year.

(k) Trace the total of the client’s accounts payable subsidiary ledger to the general ledger.

Solutions

Expert Solution

a.Examine a list of investment securities held by the client’s trustee.

Ans:

Type of Audit Procedure to be performed is Inquiry, Inspection, Documentation

Types of Assertions to be performed is, Existence, Rights and Obligations, Occurrence and classification.

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.

Ans:

Type of Audit Procedure to be performed is Documentation,Inquiry,Confirmations

Types of Assertions to be performed is Occurrence, Completeness, Accuracy

c.Send a written request to the client’s customer for verification of the amount owed to the client company.

Ans:Type of Audit Procedure to be performed is Confirmations, Enquiry.

Types of Assertions to be performed is Occurrence, Completeness, Accuracy.

(d) Examine the dealer’s invoice for a new vehicle reported on the client’s fixed assets subsidiary ledger.

Ans: Type of Audit Procedure to be performed is Physical examination, Documentation,

Types of Assertions to be performed is Existence,Rights and obligations, Completeness, Valuation, Accuracy.

e) Ask the client’s credit manager about the collectability of certain customer account balances.

Ans: Type of Audit Procedure to be performed is Analytical procedures, Confirmation, Inquiries of the Client.

Types of Assertions to be performed is Occurrence, Classification, Completeness, Accuracy.

(f) Watch the client’s process of conducting the physical inventory counts.

Ans: Type of Audit Procedure to be performed is Observation, Documentation, Reperformance.

Types of Assertions to be performed is, Existence, Rights and Obligations, Occurrence and classification.

(g) Compute interest expense on notes payable.

Ans: Type of Audit Procedure to be performed Recalculations, Confirmation

Types of Assertions to be performed is Occurrence, Completeness, Accuracy

(h) Verify the client’s bank reconciliation by testing the proper inclusion of all reconciling items.

Ans: Type of Audit Procedure to be performed is reperformance, recalculation,Confirmations

Types of Assertions to be performed is Classification, Occurrence, Rights and obligations

Accuracy and valuations

(i) Send a written request to the client’s attorney for verification of legal matters.

Ans: Type of Audit Procedure to be performed is Inquiries of the Client,Confirmation,Documentation.

Types of Assertions to be performed is Occurrence, Rights and obligations, Completeness, Classification.

(j) Compare key ratios for the current year with the same ratio results for the prior year.

Ans: Type of Audit Procedure to be performed is analytical procedures, Reperformance.

Types of Assertions to be performed is Existence, Rights and obligations, ,Valuation and allocation

(k) Trace the total of the client’s accounts payable subsidiary ledger to the general ledger.

Ans: Type of Audit Procedure to be performed is Confirmation, Observation.

Types of Assertions to be performed is Occurrence, Rights and obligations, Completeness, Classification. Accuracy and valuations

ekkarill92 answered 1 year ago

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