(Objective 7-4) Following are 10 audit procedures with words missing and a list of several...

(Objective 7-4) Following are 10 audit procedures with words missing and a list of several terms commonly used in audit procedures.

Audit Procedures

1. ____ the unit selling price times quantity on the duplicate sales invoice and compare the total to the amount on the duplicate sales invoice.

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2. ____ whether the accounts receivable bookkeeper is prohibited from handling cash.

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3. ____ the ratio of cost of goods sold to sales and compare the ratio to previous years.

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4. ____ the sales journal and ____ the total to the general ledger.

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5. ____ the sales journal, looking for large and unusual transactions requiring investigation.

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6. ____ of management whether all accounting employees are required to take annual vacations.

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7. ____ all marketable securities as of the balance sheet date to determine whether they equal the total on the client’s list.

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8. ____ the balance in the bank account directly with the East State Bank.

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9. ____ a sample of duplicate sales invoices to determine if the controller’s approval is included and ____ each duplicate sales invoice to the sales journal for agreement of name and amount.

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10. ____ the agreement between Johnson Wholesale Company and the client to determine whether the shipment is a sale or a consignment.

Terms

a. Examine

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b. Scan

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c. Read

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d. Compute

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e. Recompute

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f. Foot

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g. Trace

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h. Compare

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i. Count

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j. Observe

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k. Inquire

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l. Confirm

a. For each of the 12 blanks in procedures 1 through 10, identify the most appropriate term. No term can be used more than once.

b. For each of the procedures 1 through 10, identify the type of evidence that is being used.

Objective 7-4

Identify and apply the eight types of evidence used in auditing.