The following are audit procedures from different transaction cycles:1. Use audi

Question

The following are audit procedures from different transaction cycles:1. Use audit software to foot and cross-foot the cash disbursements journal and trace the balance to the general ledger. 2. Select a sample of entries in the acquisitions journal and trace each one to a related vendor’s invoice to determine whether one exists. 3. Examine documentation for acquisition transactions before and after the balance sheet date to determine whether they are recorded in the proper period. 4. Inquire of the credit manager whether each account receivable on the aged trial balance is collectible. 5. Compute inventory turnover for each major product and compare with previous years. 6. Confirm a sample of notes payable balances, interest rates, and collateral with lenders. 7. Use audit software to foot the accounts receivable trial balance and compare the balance with the general ledger. Required a. For each audit procedure, identify the transaction cycle being audited. b. For each audit procedure, identify the type of evidence. c. For each audit procedure, identify whether it is a test of control or a substantive test. d. For each substantive audit procedure, identify whether it is a substantive test of transactions, a test of details of balances, or an analytical procedure. e. For each test of control or substantive test of transactions procedure, identify the transaction-related audit objective or objectives being satisfied. f. For each analytical procedure or test of details of balances procedure, identify the balance-related audit objective or objectives being satisfied

Explanation / Answer

Answer:

A B C D E F 1 Acquisition and payment cycle Recalculation Substantive test a test of details of balances Posting and summarization 2 Acquisition and payment cycle Documentation Test of Control Sustantive test of transactions Occurrence 3 Acquisition and payment cycle Documentation Substantive test a test of details of balances Cutoff 4 Sales andcollection cycle Inquiry Substantive test a test of details of balances Realizable Value 5 Inventory and warehousing cycle Analytical Procedure Substantive test Analytical Procedure Realizable Value 6 Capital acquisition and repayment cycle Confirmation Substantive test a test of details of balances Existence accuracy 7 Acquisition and payment cycle Recalculation Substantive test a test of details of balances Detail tie-in

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