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Audit Program #4 - (a Insurance coverage(b Lease...

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Apple Blossom Cologne Company Audit Program for Prepaid Expenses AP - 4 W/P Ref Initials Existence/Occurrence: Rights and Obligations 1. Prepare or obtain an analysis of Prepaid Insurance account. Show beginning balance, additions, amortization, and ending balances. 2. Perform analytical procedures on the Prepaid Rent, Office Supplies, and Small Tools Inventory accounts. Determine reasonableness of each; investigate unusual items, unexpected fluctuations, and the absence of fluctuations when expected. 3. Examine cash vouchers and appropriate documents supporting additions to account. 4. Obtain confirmations from external parties when appropriate:
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Unformatted text preview: (a) Insurance coverage. (b) Lease agreements. (c) Leased properties. Completeness 5. Examine insurance policies on hand and check details to prepaid insurance schedule. Valuation or Allocation 6. Test clerical accuracy of detail schedules. 7. Trace beginning balances to prior year's working papers. 8. Trace ending asset balances to balance sheet trial balance and ending amortization balances to income statement trial balance. 9. Based on the terms of each element of prepaid expense, compute amount amortized to expense during year....
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