Reference no: EM132782555
Your audit firm has listed below some of the selected substantive audit procedures:
1. Ensure that interest paid on the bank loan is correct by multiplying the interest rate by the outstanding principal for each month of the year.
2. Send a letter to the bank to confirm a loan taken out by the company during the year.
3. Attend the year-end stockstake and perform test counts on a sample of stock items.
4. Review all invoices received for one month after the year-end to ensure that they do not relate to the current year.
5. Calculate the accounts receivable turnover and compare with previous year's turnover.
6. Select a sample of non-current assets and sight them.
7. Review the income statement for unusual differences in the balances recorded for this year and last year.
8. Select a sample of invoices and ensure that they have been properly recorded in the sales ledger.
9. Trace the last inventory received before the year-end to the inventory listing.
10. Review the adequacy of the company's allowance for doubtful debts.
REQUIRED:
Problem (a) For EACH test above, indicate what type of substantive audit procedure to which it relates (analytical review, tests of details of balances or tests of details of transactions).