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Concept explainers
For each of the
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Audit Procedure |
Assertion |
Financial Statement Account |
1 |
Review and test the procedures for identifying obsolete and damaged inventory
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2 |
Compare the current periods number of days sales outstanding with prior periods and consider reasonableness considering current economic conditions
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3 |
Agree a sample of travel expenses from the general ledger to supporting supplier invoices
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4 |
Attend the client’s year end stock-take and select a sample of stock items from the warehouse shelves and agree them to client’s inventory count sheets.
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5 |
Compare your client’s gross profit % to prior periods
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6 |
Review and determine the adequacy of your client’s instructions to their staff concerning the counting of inventory.
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7 |
For a sample of days compare the daily sales total recorded on the till system to banking’s and the general ledger.
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8 |
For all payments over planning materiality made by your client for 2 months after balance date determine how they have been accounted for in the financial statements.
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9 |
Obtain a confirmation from your client’s bank of account balances and details at balance date.
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10 |
For customer balances over planning materiality outstanding at balance date determine if they have been subsequently paid by the customer.
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- 11) To obtain evidence on the completeness assertion for revenue, the auditor would select a sample of shipping documents and trace them to the sales journal True Falsearrow_forwardDescribe one specific substantive audit procedure you would use to test the financial statement assertion you are most concerned with based on your analysis of inventory in the bakeryarrow_forwardAll partsarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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