Reference no: EM132727987
Below are audit procedures for the sales and collection, and acquisition and payments cycles. In each case, indicate the type of audit procedure (e.g. test of control, analytical procedure, substantive test of transactions, or test of details of balances), the transaction-related or balance-related audit objective and type of evidence (e.g. documentation, observation etc.).
Audit Procedure
Type of Audit Procedure
Audit Objective
Type of Evidence
Problem 1. Trace recorded sales transactions to shipping documents to determine whether a document exists.
Problem 2. Obtain a prelisting of cash receipts and trace amounts to the cash receipts journal, testing for names, amounts and dates.
Problem 3. Calculate ratios such as purchases divided by accounts payable, and accounts payable divided by current liabilities.
Problem 4. Examine sales transactions for any related-party or employee sales that have been recorded as regular sales.
Problem 5. Examine supporting documentation for cash payments subsequent to the balance sheet date to determine whether a cash payment was for a current-period liability.