Audit Assertions, Acceptance and Simulation

Audit Assertions, Acceptance, and Simulation

6-25 (Substantive tests and audit evidence) In meeting the third standard of field work, the auditor may perform the following types of substantive tests: (a) tests of details of transactions, (b) tests of details of balances, (c) tests of details of disclosures, and (d) analytical procedures.

Below are listed specific audit procedures that fall within one of these categories.

1. Compare actual results with budget expectations.

2. Vouch entries in check register to “paid” checks.

3. Recalculate accrued interest payable.

4. Confirm customer balances.

5. Calculate inventory turnover ratios and compare with industry data.

6. Reconcile bank accounts at year-end.

7. Vouch sales journal entries to sales invoices.

8. Count office supplies on hand at year-end.

9. Examine deeds of ownership for land purchased during year.

10. Obtain representation letter from management.

11. Scan postings to repair expense for evidence of charges that should be capitalized.

12. Ask storeroom supervisor about obsolete items.

13. Examine a loan document to determine terms of the note and debt maturities.

Required

List the numbers of the foregoing procedures. For each procedure, indicate the type of substantive test and the type of audit procedure used by the auditor. Use the following format for your answers:

Audit Procedure No Type of Substantive Test Type of Audit Procedure

1 Analytical Review Procedures Analytical Procedure

2 Test of Transactions Inspection of Documents and Records

3 Test of Balances Reconciliation

4 Test of Balances Conformation

5 Analytical Review Procedures Analytical Procedures

6 Test of Balances Reconciliation

7 Test of Transactions Inspection of Documents and Records

8 Test of Balances Inspection of Tangible Assets

9 Analytical Balances Inspection of Documents and Records

10 Analytical Review Procedures Inquiry

11 Test of Transactions Inspection of Documents and Records

12 Test of...