Chapter 3 - Audit Procedures Flashcards
Sending a written request to the entity’s customers requesting that they report the amount owed to the entity. Which audit procedure?
Inquiry & confirmation
Examining large sales invoices for a period of two days before and after year-end to determine if sales are recorded in the proper period. Which audit procedure?
Inspection of records or documents
Agreeing the total of the accounts receivable subsidiary ledger to the accounts receivable general ledger account. Which audit procedure?
Inspection of records or documents
Discussing the adequacy of the allowance for doubtful accounts with the credit manager. Which audit procedure?
Inquiry
Agreeing the total of the accounts receivable subsidiary ledger to the accounts receivable general ledger account. Which audit procedure?
Inspection of records or documents
Comparing the current-year gross profit percentage for the last four years. Which audit procedure?
Analytical procedures
Examining a new plastic extrusion machine to ensure that this major acquisition was received. Which audit procedure?
Inspection of tangible assets
Watching the entity’s warehouse personnel count the raw materials inventory. Which audit procedure?
Observation
Performing test counts of the warehouse personnel’s count of the raw material. Which audit procedure?
Reperformance
Obtaining a letter from the entity’s attorney indicating that there were no lawsuits in progress against the entity. Which audit procedure?
Confirmation
Tracing the prices used by the entity’s billing program for pricing sales invoices to the entity’s approved price list. Which audit procedure?
Inspection of records or documents
Reviewing the general ledger for unusual adjusting entries. Which audit procedure?
Scanning
