Terms, Audit Procedures, and Types of Evidence

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Compute

A calculation done by the auditor independent of the client. (Compute the inventory turnover ratios and compare with those of previous years as a test of inventory obsolescence - Analytical procedures.)

Recompute

A calculation done to determine whether a client's calculation is correct. (Recompute the unit sales price times the number of units for a sample of duplicate sales invoices and compare the totals with the calculations - Recalculation.)

Compare

A comparison of information in two different locations. The instruction should state which information is being compared in as much detail as practical. (Select a sample of sales invoices and compare the unit selling price as stated on the invoice to the list of unit selling prices authorized by management - Documentation.)

Count

A determination of assets on hand at a given time. This term should be associated only with the type of evidence defined as physical examination. (Count a sample of 100 inventory items and compare quantity and description to client's counts - Physical examination.)

Scan

A less-detailed examination of a document or record to determine whether there is something unusual warranting further investigation. (Scan the sales journal, looking for large and unusual transactions - Analytical procedures.)

Examine

A reasonably detailed study of a document or record to determine specific facts about it. (Examine a sample of vendors' invoices to determine whether the goods or services received are reasonable and of the type normally used by the client's business - Documentation.)

Foot

Addition of a column of numbers to determine whether the total is the same as the client's. (Foot the sales journal for a 1-month period and compare all totals with the general ledger - Recalculation.)

Read

An examination of written information to determine facts pertinent to the audit. (Read the minutes of a board of directors meeting and summarize all information that is pertinent to the financial statements in an audit file - Documentation.)

Trace

An instruction normally associated with documentation or reperformance. The instruction should state what the auditor is tracing an where it is being traced from and to. Often, an audit procedure hat includes the term trace will also include a second instruction, such as compare or recalculate. (Trace a sample of sales transactions from the sales journal to sales invoices, and compare customer name, date, and the total dollar value of the sale - Documentation; Trace postings from the sales journal to the general ledger accounts - Reperformance.)

Inquire

The act of inquiry should be associated with the type of evidence defined as inquiry. (Inquire of management whether there is any obsolete inventory on hand at the balance sheet date - Inquiries of client.)

Observe

The act of observation should be associated with the type of evidence defined as observation. (Observe whether the two inventory count teams independently count and record inventory counts - Observation.)

Vouch

The use of documents to verify recorded transactions or amounts. (Vouch a sample of recorded acquisition transactions to vendors' invoices and receiving reports - Documentation.)


Ensembles d'études connexes

The next person you meet in haven

View Set

GMU CS262 Final Exam Spring 2022

View Set

Nursing 351 Ethical Issues in Nursing

View Set

Nursing prep u GI disorders upper and lower

View Set

California Hunter Safety - Unit 8 Quiz

View Set

mastering in geology part 2 part 2

View Set

General Psychology Unit 2 (Chapters 5-8)

View Set