Transaction/Balance Related Audit Objective Audit Procedure ated Audit Objective

Question

Transaction/Balance Related Audit Objective Audit Procedure ated Audit Objective Management Assertion Audit Evidence obtain a letter from the client's attorney addressed to the CPA firm stating that the attorney is not aware of any existing lawsuits Confirmation Physical Examination count a sample of inventory tems and record the amount in the audit files Recalculation Add the sales journal entries to determine whether they were correctly totaled Obtain a written statement from bank stating that the client has $15,671 on deposit and liabilities of $500,000 on a demand note Confirmation Compare a duplicate sales invoice with the sales journal for customer name and amount Inspection Review the Accounts Receivable with the credit manager to evaluate their collectibility Inquiries of Client Calculate the ratio of sales commission expense to sales as a test of sales commissions Analytical Procedures

Explanation / Answer

Audit procedure Transaction/balance related audit objective Management assertion Audit evidence obtain a letter ……existing lawsuits All the legal cases accounts and their history Let the Auditor get aware of all legal suits confirmation count a …. Audit fles All the inventory accounts and their confirmation, physically and amount-wise to confirm the inventory balances to the auditors physical examination Add the …. Correctly totaled all entries from sales invoice issued to sales book and their totals to confirm the balances in sales book recalculation Obtain a …. Demand note to have confirmation on the balance balances deposits balances the banks to be confirmed confirmation Compare a …. And amount duplicate sales to confirm the customers must provide the list of customers and confirm them inspection Review the … collectibility The accounts receivables accounts and confirmation of the amount due to them must confirm the receivables dues inquiries of client calculate the … commissions checking sales commission account with commission % and sales book must provide all records and percentage to auditors Analytical procedures

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