For each of the audit procedures listed below state the primary ‘Assertion’ and the related financial statement account (i.e. Receivables, Inventory etc.) it is focused on. (Answer in the table format below).     Audit Procedure Assertion Financial Statement Account 1 Review and test the procedures for identifying obsolete and damaged inventory       2 Compare the current periods number of days sales outstanding with prior periods and consider reasonableness considering current economic conditions       3 Agree a sample of travel expenses from the general ledger to supporting supplier invoices       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.       5 Compare your client’s gross profit % to prior periods       6 Review and determine the adequacy of your client’s instructions to their staff concerning the counting of inventory.       7 For a sample of days compare the daily sales total recorded on the till system to banking’s and the general ledger.       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.       9 Obtain a confirmation from your client’s bank of account balances and details at balance date.       10 For customer balances over planning materiality outstanding at balance date determine if they have been subsequently paid by the customer.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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For each of the audit procedures listed below state the primary ‘Assertion’ and the related financial statement account (i.e. Receivables, Inventory etc.) it is focused on. (Answer in the table format below).

 

 

Audit Procedure

Assertion

Financial Statement Account

1

Review and test the procedures for identifying obsolete and damaged inventory

 

 

 

2

Compare the current periods number of days sales outstanding with prior periods and consider reasonableness considering current economic conditions

 

 

 

3

Agree a sample of travel expenses from the general ledger to supporting supplier invoices

 

 

 

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.

 

 

 

5

Compare your client’s gross profit % to prior periods

 

 

 

6

Review and determine the adequacy of your client’s instructions to their staff concerning the counting of inventory.

 

 

 

7

For a sample of days compare the daily sales total recorded on the till system to banking’s and the general ledger.

 

 

 

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.

 

 

 

9

Obtain a confirmation from your client’s bank of account balances and details at balance date.

 

 

 

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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