Homework SourseBelow are 10 audit procedures Classify each procedure accord
Below are 10 audit procedures. Classify each procedure according to the following types of audit evidence: (1) physical examination, (2) confirmation, (3) documentation, (4) observation, (5) inquiry of the client, (6) reperformance, and (7) analytical procedure
Type of Evidence
Audit Procedures
Watch client employees count inventory to determine whether company procedures are being followed.
Count inventory items and record the amount in the audit files.
Trace postings from the sales journal to the general ledger accounts.
Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year.
Obtain information about the client\'s internal controls by asking questions of client personnel.
Trace column totals from the cash disbursements journal to the general ledger.
Examine a piece of equipment to make sure a recent purchase of equipment was actually received and is in operation.
Review the total of repairs and maintenance for each month to determine whether any month\'s total was unusually large.
Compare vendor names and amounts on purchase invoices with entries in the purchases journal.
Foot entries in the sales journal to determine whether they were correctly totaled by the client.
| Type of Evidence | Audit Procedures |
| Watch client employees count inventory to determine whether company procedures are being followed. | |
| Count inventory items and record the amount in the audit files. | |
| Trace postings from the sales journal to the general ledger accounts. | |
| Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year. | |
| Obtain information about the client\'s internal controls by asking questions of client personnel. | |
| Trace column totals from the cash disbursements journal to the general ledger. | |
| Examine a piece of equipment to make sure a recent purchase of equipment was actually received and is in operation. | |
| Review the total of repairs and maintenance for each month to determine whether any month\'s total was unusually large. | |
| Compare vendor names and amounts on purchase invoices with entries in the purchases journal. | |
| Foot entries in the sales journal to determine whether they were correctly totaled by the client. |
Solution
Type of Evidence
Audit Procedures
Observation
Watch client employees count inventory to determine whether company procedures are being followed.
Physical examination
Count inventory items and record the amount in the audit files.
Reperformance
Trace postings from the sales journal to the general ledger accounts.
Analytical Procedure
Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year.
Inquiry of the client
Obtain information about the client\'s internal controls by asking questions of client personnel.
Reperformance
Trace column totals from the cash disbursements journal to the general ledger.
Physical examination
Examine a piece of equipment to make sure a recent purchase of equipment was actually received and is in operation.
| Type of Evidence | Audit Procedures |
| Observation | Watch client employees count inventory to determine whether company procedures are being followed. |
| Physical examination | Count inventory items and record the amount in the audit files. |
| Reperformance | Trace postings from the sales journal to the general ledger accounts. |
| Analytical Procedure | Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year. |
| Inquiry of the client | Obtain information about the client\'s internal controls by asking questions of client personnel. |
| Reperformance | Trace column totals from the cash disbursements journal to the general ledger. |
| Physical examination | Examine a piece of equipment to make sure a recent purchase of equipment was actually received and is in operation. |
