Auditing

1. The client has inventory at approximately 50 locations in a three-state region. The inventory is difficult to count acquisitions, cash disbursements, and perpetual records are considered effective. This is the fifth year that you have done the audit, and audit results in past years have always been excellent. The client is in excellent financial condition..

2. This is the first year if an audit of a medium-sized company that is considering selling its business because of severe under financing. A review of the acquisition and payment cycle indicates that controls over cash disbursements are excellent but controls over acquisitions cannot be considered effective. The client lacks receiving reports and a policy as to the proper timing to record acquisitions. When you review the general ledger, you observe that there are

many large adjusting entries to correct accounts payable.

3. You are doing the audit of a small loan company with extensive receivables from customers, controls over granting loans, collections, and loans outstanding are considered effective, and there is extensive follow-up of all outstanding loans weekly. You have recommended a new computer system for the past two years, but management believes the cost is too great, given their low profitability. Collections are an ongoing problem because many of the customers have severe financial problems. Because of adverse economic conditions, loans receivable have significantly increased and collections are less than normal. In previous years, you have had relatively few adjusting entries.

|Evidence mix |

| Test of control substantive test of analytical test of detail |

|Translations procedures of...