Audit Procedures

Question 1

During a site visit to a branch warehouse, the auditor noted unauthorized personnel have access to the inventory.

Answer 1

Observation

Question 2

The auditor obtained a copy of the company’s accounting manual and read the section on inventory to prepare for the physical inventory observation.

Answer 2

Inspection

Question 3

The auditing firm’s computer assisted audit specialist obtained an electronic billing file from the company and checked the accuracy of the summarized billings file.

Answer 3

Recalculation

Question 4

During the physical inventory count, the auditor requested that certain material containers be opened to ensure they were not empty.

Answer 4

Inspection

Question 5

The auditor scanned the repairs and maintenance account for unusually large amounts.

Answer 5

Analytical

Question 6

The auditor sent a letter to the company’s outside attorney accompanied by management’s request for information concerning pending or threatened litigation, claims, and assessments.

Answer 6

Inquiry

Question 7

The auditor obtained the company’s aging of accounts receivable and independently created the aging of certain accounts.

Answer 7

Reperformance