Audit procedures and Management assertions For each of the audit procedures list
ID: 2568727 • Letter: A
Question
Audit procedures and Management assertions
For each of the audit procedures listed below, choose the assertion that is most likely tested by the procedure:
Assertion choices:
Completeness
Rights and obligations
Valuation or allocation
Existence or occurrence
Statement presentation and disclosure
Audit Procedures
_____ 1. The auditor reviewed delinquent customers’ credit ratings.
_____ 2. The auditor confirmed accounts receivable.
_____ 3. The auditor performed a sales cutoff test to assure that all sales transactions for
the year were included in the balance.
_____ 4. The auditor accounted for the numerical sequence of sales orders.
_____ 5. The auditor vouched the recorded accounts receivables to shipping documents.
_____ 6. The auditor determined that accounts receivable was presented on the balance
sheet as a current asset.
_____ 7. The auditor aged the accounts receivable.
_____ 8. The auditor inquired of management about the possibility that the receivables had
been sold or factored.
Explanation / Answer
Audit Procedures
To ensure the Valuation or allocation 1. The auditor reviewed delinquent customers’ credit ratings.
To ensure the Existence or occurrence of receivable accounts 2. The auditor confirmed accounts receivable.
To ensure the Completeness of revenue: 3. the auditor performed a sales cutoff test to assure that all sales transactions for the year were included in the balance.
To ensure the Completeness of revenue 4. The auditor accounted for the numerical sequence of sales orders.
To ensure the Existence or occurrence of receivable accounts 5. The auditor vouched the recorded accounts receivables to shipping documents.
To ensure the Statement presentation and disclosure 6. The auditor determined that accounts receivable was presented on the balance sheet as a current asset.
To ensure the Valuation or allocation 7. The auditor aged the accounts receivable.
To ensure the rights and obligations 8. The auditor inquired of management about the possibility that the receivables had been sold or factored.
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