Audit Objectives

Question 1

Accounts Receivable are stated at NRV

Answer 1

Valuation Assertion

Review aged trial balance for significant past due accounts

Question 2

A/R are properly described and presented in F/S

Answer 2

Classification and understandibility

Review A/R trial balance for amounts due to officers and employees

Question 3

A/R represent all amounts owed at balance sheet date

Answer 3

Completeness

Perform sales cutoff test to obtain assurance that sales transactions and corresponding entries for inventories & COGS are recorded in same and proper period

Question 4

Entity has legal rights to all A/R at balance sheet date

Answer 4

Rights and Obligations

Review loan agreements to see if A/R have been factored or pledged

Question 5

Net property and Equipment are properly valued at B/S Date

Answer 5

Valuation and Allocation

Review the provision for depreciation expense and determine if methods and useful life are consistent with previous years

Question 6

Recorded property and equipment represents assets that actually exist at the B/S date

Answer 6

Existence

Physically examine all major property and equipment additions

Question 7

Entity has legal rights to property and equipment acquired during year

Answer 7

Rights

Examine deeds and title insurance certificates

Question 8

Investments are properly valued at B/S Date

Answer 8

Valuation and allocation

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

Question 9

Investments are properly described and classified in the F/S

Answer 9

classification and understandability

Verify that transfers from the current to non-current investment portfolio have been properly recorded

Question 10

Recorded investments represent investments actually owned at the B/S date

Answer 10

Rights

Obtain positive confirmations as of the balance sheet date of investments held by independent custodians