Exam Q's and a's for Ch 5 & 6 Auditing

78. | For each of the audit procedures listed below select the type of audit procedure, if any, that the auditor performed. A type of audit procedure may be selected once or not at all. 

1. 2. During a site visit to a branch warehouse, the auditor noted unauthorized personnel have access to the inventory.  |      Inspection of records or documents.  |   ___3_  |

2. 3. The auditing firm's computer assisted audit specialist obtained an electronic billing file from the company and checked the accuracy of the summarized billings file.  |      Observation.  |   __1__  |

3. 1. The auditor obtained a copy of the company's accounting manual and read the section on inventory to prepare for the physical inventory observation.  |      Recalculation.  |   __2__  |

4. 5. The auditor selected a sample of invoices and agreed the vendor to the approved vendor list, as had been required by the client's internal control procedures.  |      Analytical Procedures  |   __7__  |

5. 6. During the physical inventory count, the auditor requested that certain containers of inventory items be opened to ensure they were not empty.  |      Reperformance.  |   __4__  |

6. 7. The auditor sent a letter to the company's outside attorney accompanied by management's request for information concerning pending or threatened litigation, claims, and assessments.  |      Inspection of tangible assets.  |   __5__  |

7. 4. The auditor scanned the repairs and maintenance account for unusually large amounts.  |      Inquiry.  |   ___6_  |

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Essay Questions

79. | Analytical procedures are substantive procedures that may be used to provide evidence about specific accounts and classes of transactions.

a. Describe three major types of comparisons the auditor might make in performing analytical procedures.Comparisons with prior years' data.

Comparisons with budgets and forecasts.

Comparisons with industry statistics.

Comparisons with nonfinancial data.

Comparisons of...