101 aud tbs

Question 1

Identify inventory transactions involving related parties.

Answer 1

Review minutes of board of directors meetings and contracts, and make inquiries of management.

Question 2

Determine that items counted are included in the inventory listing.

Answer 2

Reconcile physical counts to perpetual records and general ledger balances and investigate significant fluctuation.

Question 3

Determine that financial statements include proper disclosures relating to inventory.

Answer 3

Obtain confirmation of inventories pledged under loan agreement.

Question 4

Determine that recorded inventory is owned.

Answer 4

Examine paid vendors’ invoices, consignment agreements, and contracts.

Question 5

Audit procedures for investments

Investments are properly described and classified in the financial statements.

Answer 5

Verify that transfers from the current to the noncurrent investment portfolio have been properly recorded.

Question 6

Audit procedures for investments

Trading investments are properly valued at fair market value at the balance sheet date.

Answer 6

Determine that any impairments in the price of investments have been properly recorded.

Question 7

Audit procedures for accounts receivable

Accounts receivable represent all amounts owed to the entity at the balance sheet date.

Answer 7

Perform sales cutoff tests to obtain assurance that sales transactions and corresponding entries for inventories and cost of goods sold are recorded in the same and proper period.

Question 8

Audit procedures for accounts receivable

Accounts receivable are properly described and presented in the financial statements.

Answer 8

Review the accounts receivable trial balance for amounts due from officers and employees.