Question

II. Classify each of the following according to type of audit evidence: A. Analytical procedures E. Observation B. Confirmation F. Inspection of Assets ( i.e. Physical Examination) c. Examination of Documents G. Recalculation D. Inquiry Reperformance I. Scanning Items 1. Cheet Check the extensions (multiplications) on sales invoices. 2. The auditor tests interest expense by developing an overall reasonableness test rather than redoing all the bond amortization schedules. (Don't use G, recalculation) Vouch sales invoices to related shipping documents to see if billed items were shipped. 4. Send letters to customers asking them how much they owe the company. 5. Ask the manager about the condition of inventory as a test for obsolescence. 6. Review the Accounts Receivable Subsidiary Ledger for negative (i.e. credit) amounts for possible reclassification. 7. Trace shipping documents to related sales invoices to determine that sales have been billed. The auditor checks an internal control procedure (i.e. a walkthrough) to gain an understanding of the client's internal control structure. Select only ONE letter for each of the procedures Answers 1. – 2. – 3. – 4. - 5. – 6. – 7. — 8. –

Answer 1

1.G Recalculation

2.H Reperformance

3.C Examination of documents

4.B Conformation

5.F Inspection of assets

6.I Scanning

7.A Analytical Proceduers

8.D Inqury