Reference no: EM133003706

The following audit procedures from last year were provided to you by Fran for you to familiarize yourself with what type of work is typically done over the inventory cycle before the audit begins.

Audit procedures:

1. Using audit software, extend unit prices times quantity, foot the extensions, and compare the total with the ledger.
2. Trace selected quantities from the inventory listing to the physical inventory to make sure the items exist, and the quantities are the same.
3. Inquire with operating personnel about the possibility of obsolete or slow-moving inventory.
4. Select a sample of quantities of inventory in the factory warehouse and trace each item to the inventory count sheets to determine if it has been included and if the quantity and description are correct.
5. Using both this year's and last year's inventory data files, compare quantities on hand and unit prices, printing any with greater than a 30% or $15,000 variation from one year to the next.
6. Send letters directly to third parties who hold the client's inventory and request that they respond directly to us.

Problem a) For each of the audit procedures above, identify the type of audit evidence used for each audit procedure.

Problem b) For each of the audit procedure above, identify the balance assertion(s) tested by each audit procedure.