Listed below are several of the auditors’ general objectives in performing substantive procedures on an asset account:Establish the existence of assets.Establish that the company has rights to the assets.Establish the completeness of recorded assets.Verify the cutoff of transactions.Determine the appropriate valuation of the assets.Establish the clerical accuracy of the underlying records.Determine the appropriate financial statement presentation and disclosure of the assets. Required:Indicate the general objective (or objectives) of each of the following audit procedures: a. Observe the client’s physical inventory. b. Locate on the client’s premises a sample of the equipment items listed in the subsidiary plant and equipment ledger. c. Obtain a listing of inventory and reconcile the total to the general ledger. d. Trace a sample of shipping documents to recorded sales transactions. e. Identify related parties. f. Vouch selected purchases of securities to brokers’ advices.

Audit procedures is the criteria or steps performed by the auditor in order to get all the…

Answered: Listed below are several of the…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 34RSCQ

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Listed below are several of the auditors’ general objectives in performing substantive procedures on an asset account:

Establish the existence of assets.
Establish that the company has rights to the assets.
Establish the completeness of recorded assets.
Verify the cutoff of transactions.
Determine the appropriate valuation of the assets.
Establish the clerical accuracy of the underlying records.
Determine the appropriate financial statement presentation and disclosure of the assets.

Required:

Indicate the general objective (or objectives) of each of the following audit procedures:

a. Observe the client’s physical inventory.

b. Locate on the client’s premises a sample of the equipment items listed in the subsidiary plant and equipment ledger.

c. Obtain a listing of inventory and reconcile the total to the general ledger.

d. Trace a sample of shipping documents to recorded sales transactions.

e. Identify related parties.

f. Vouch selected purchases of securities to brokers’ advices.

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