2HW audit - 1) Observe the clients inventory-taking...

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1) Observe the client’s inventory-taking procedures a. Physically Examination—known as observation 2) Obtain a report on the valuation of inventory by a specialist a. 3 rd - party representation 3) Examine an invoice in support of a sales transaction a. Documentary evidence- created internally by the client. b. The reliability of this would be the “lowest” since the company created the invoice for the sale and also kept record of it. The auditor in this case would want to perhaps speak to the party the sale was made to verify its authenticity. 4) Examine an invoice in support of a purchase transaction a. Documentary evidence- created externally and held by the client, b. this would be a little more reliable since they would be able to see where they purchased the inventory from and then check with that vendor. 5) Test the extensions on an inventory schedule a. Computations 6) Inspect the client’s bank statement a. Documentary evidence- inspection- b. this evidence is most reliable since it is received directly by the auditors
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This note was uploaded on 03/11/2011 for the course ACCT 200 taught by Professor Jeffrey during the Spring '11 term at Universidad Francisco de Paula Santander.

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2HW audit - 1) Observe the clients inventory-taking...

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