Listed below are several of the auditor\'s general objectives in performing subs

Question

Listed below are several of the auditor's general objectives in performing substantive tests of an asset account. AUDITOR'S GENERAL OBJECTIVES IN PERFORMING SUBSTANTIVE TESTS OF ASSET ACCOUNTS (1) |Establish the existence of assets (2) Establish that the company has rights to the assets. (3) Establish the completeness of recorded assets (4)Determine the appropriate valuation of the assets. (5) Establish the clerical accuracy of the underlying records (6) Determine the appropriate financial statement presentation and disclosure of the assets. Using the objectives provided above, indicate the general objective (or objectives) for each of the attached audit procedures. Provide a brief explanation for your choice(s).

Explanation / Answer

(a) -> (5) This work of HANDLING PETTY CASH, BOOK KEEPING done by clerk So Count petty cash on hand will indicate 5th objective

(b) -> (1) Locating equipment says existence of asset present in the business

(c)-> (4) Reconcile of general ledger indicates determining the real value of asset to provide accurate financial statement

(d)-> (3) tracing is done to know whether any asset of business in missed out in recording

(e)-> (6) letter contains the presentation and disclosure of asset. This is point indicate the determination of financial statement presentation and disclosure of the asset

(f)-> (2) Auditor should establish that the company has a right on purchases of securities to broker advice

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