Auditing and Assurance Services, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134075754
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 13, Problem 25DQP
a.
To determine
Identify the transaction cycle being audited.
b.
To determine
Identify the evidence for each transaction.
c.
To determine
Identify whether it is a test of control or substantive test for each transaction.
d.
To determine
Identify whether it is a substantive test of transactions, a test of details of balances or substantive analytical procedure.
e.
To determine
Identify each transactions related audit objective or objectives being satisfied.
f.
To determine
Identify each transactions balance related audit objective or objectives being satisfied.
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Students have asked these similar questions
The following are commonly performed tests of controls and substantive tests of transactions audit procedures in the sales and collection cycle, acquisition and payment cycle, and inventory and warehousing cycle:
Account for a sequence of shipping documents and examine each one to make sure that a duplicate sales invoice is attached.
Compare the quantity and description of items on shipping documents with the related duplicate sales invoices.
Trace a sample of voucher packages to the acquisitions journal throughout the year to determine that the transaction is included in the acquisitions journal.
Determine if the transaction was recorded in the correct month, based on when the goods were received and the terms of the transaction.
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Required:
Identify for each test the related cycle.
Identify whether each audit procedure is a test of control or a substantive test of transactions.
State which of the six transaction-related audit objectives each of the audit procedures fulfills.
of
stion
For a sample of sales transactions selected from the sales journal, verify that the amount of the transaction has
been recorded in the correct customer account in the accounts receivable subledger.
Choose the Audit Objective:
Choose the specific audit objective
→
The following are commonly performed tests of controls and substantive tests of transactions audit procedures in the sales and collection cycle:
Review the prelisting of cash receipts to determine whether cash is prelisted daily.
Reconcile the recorded cash receipts on the prelisting with the cash receipts journal and the bank statement for a one-month period.
Account for a sequence of shipping documents and examine each one to make sure that a related sales invoice exists.
Account for a sequence of sales invoices and examine each one to make sure that a related shipping document exists.
Compare the quantity and description of items on shipping documents with the related sales invoices.
Trace recorded sales in the sales journal to the related accounts receivable master file and compare the customer name, date, and amount for each one.
Examine sales returns for approval by an authorized official.
Required
Identify whether each audit procedure is a test of control or a…
Chapter 13 Solutions
Auditing and Assurance Services, Student Value Edition (16th Edition)
Ch. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Explain how the calculation and comparison to...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - For each of the eight types of evidence discussed...
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Prob. 16RQCh. 13 - Prob. 17RQCh. 13 - Prob. 18RQCh. 13 - Prob. 19RQCh. 13 - Prob. 20.1MCQCh. 13 - Prob. 20.2MCQCh. 13 - A conceptually logical approach to the auditors...Ch. 13 - Prob. 21.1MCQCh. 13 - Prob. 21.2MCQCh. 13 - Prob. 21.3MCQCh. 13 - Prob. 22.1MCQCh. 13 - b. Substantive analytical procedures are most...Ch. 13 - Prob. 22.3MCQCh. 13 - Prob. 23DQPCh. 13 - Prob. 24DQPCh. 13 - Prob. 25DQPCh. 13 - Prob. 26DQPCh. 13 - Prob. 27DQPCh. 13 - Prob. 28DQPCh. 13 - Prob. 29DQPCh. 13 - Prob. 30DQPCh. 13 - Prob. 31DQPCh. 13 - Prob. 32DQPCh. 13 - Prob. 33DQPCh. 13 - Prob. 35C
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Similar questions
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- Which of the following test controls most likely would help assure an auditor that goods shipped are properly billed? A. Scan the sales journal for sequential and unusual entries. B. Examine shipping documents for matching sales invoice. C. Compare the accounts receivalbe ledger to daily sales summaries. D. inspect unused sales invoices for consecutive prenumbering.arrow_forwardThe following audit procedures are included in the audit programfor the audit of the financial statements of Golden State Overnight Express:1. Select a sample of acquisitions from the acquisitions journal and perform the following:a. Vouch the transaction to the voucher package that includes the matched receivingreport, purchase order, and vendor invoice.b. Verify that the purchase order was approved by an authorized purchasing agent.c. Verify that the initials of accounts payable clerk are present, indicating that thedocuments have been appropriately matched and that amounts on the vendorinvoice were verified.d. Recalculate the invoice amount and compare the dollar amounts per the invoiceto the amount recorded in the acquisitions journal.e. Examine whether the transaction was recorded to the correct vendor in theaccounts payable master file.f. Determine if the transaction was recorded in the correct month, based on whenthe goods were received and the terms of the transaction.g. Review…arrow_forwardIndicate whether each of the following audit procedures is a testof controls, a substantive test, or a dual-purpose test. Next, indicate the financial statement assertion most closely related to each audit procedure. Required:a. Vouch recorded sales invoices to supporting shipping documents.b. Inspect recorded sales invoices for credit approval.c. Vouch recorded sales invoices prices to the approved price list.d. Send confirmations to all customers regarding accounts receivable.e. Recalculate the arithmetic accuracy of the recorded sales invoices.f. Compare the shipment date of recorded sales invoices with the invoice record date.g. Trace recorded sales invoices to posting in the general ledger control account and in the correct customer’s account.h. Select a sample of shipping documents from the shipping department file and trace shipments to recorded sales invoices.i. Scan recorded sales invoices and shipping documents for missing numbers in sequence.j. Vouch sales invoices and…arrow_forward
- The following are examples of audit procedures:  Watch employees count inventory to determine whether company procedures are being followed.  Count a sample of inventory items and record the amount in the audit files.  Calculate the ratio of sales commission expense to sales as a test of sales commissions.  Review the accounts receivable with the credit manager to evaluate their collectability.  Compare a duplicate sales invoice with the sales journal for customer name and amount.  Obtain a written statement from a bank stating that the client has $15,671 on deposit and liabilities of $500,000 on a demand note.  Add the sales journal entries to determine whether they were correctly totaled.  Obtain a letter from the client’s attorney addressed to the CPA firm stating that the attorney is not aware of any existing lawsuits.  Extend the cost of inventory times the quantity on an inventory listing to test whether it is accurate.  Obtain a letter from an…arrow_forward22) Use audit software to foot and crossfoot the cash disbursements journal and trace the balance to the general ledger. This is which of the following tests                A) test of balances              B) analytical procedure   C) test of transactions        D) test of controlarrow_forward22) Use audit software to foot and cross foot the cash disbursements journal and trace the balance to the general ledger. This is which of the following tests A) test of balances B) analytical procedure C) test of transactions D) test of controlarrow_forward
- When a sample of customer accounts receivable is selected for vouching debits, auditors will vouch them toa. Sales invoices with shipping documents and customer sales invoices.b. Records of accounts receivable write-offs.c. Cash remittance lists and bank deposit slips.d. Credit files and reports.arrow_forwardYou are part of the audit team that is auditing Hillsburg Hardware Co. and you have been assigned to the sales and collection business process. You are testing whether the cash received has been recorded in the cash receipts journal. (completeness objective/assertion). List two tests of controls and at least one test of transactions that you would do to satisfy yourself regarding the completeness assertion. attachmentsarrow_forwardWhich of the following audit procedures is a dual-purpose test, which tests the effectiveness of internal controls as well as any material misstatements in the financial statements? Â A. The auditor accounts for the sequence of sales invoices. Â B. The auditor selects a sample of transactions in the sales journal and traces them to the relevant shipping documents. Â C. The auditor adds the transactions in the purchase journal and agrees to the total amount recorded in the general ledger. Â D. A test over the bank reconciliation. Â E. The auditor obtains a sample of timesheets for casual employees and checks for evidence of approval.arrow_forward
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