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Chapter 7 - Audit Evidence + Documentation

Also review with the client any significant changes

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payable. Also review with the client any significant changes in the accounts payable from the prior period. Foot the accounts payable lead schedule and agree the balance to the accounts payable subsidiary ledger and to the general ledger. Scan the accounts payable subsidiary ledger for significant debit balances and for payables to officers or related parties.
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Examples – A/P (cont’d) Evidence Evidence Type Assertion Tested Select a sample of vendors from the approved vendor list and request them to provide a statement of their account balance as of the balance date. Reconcile any differences. Select a sample of account balances from the accounts payable subsidiary ledger and trace amounts to supporting documentation. Review the cash disbursement journal for 30 days after the balance sheet date. Trace all disbursements greater than $________ to supporting documents to determine recorded in the correct period.
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+ Types of Audit Evidence: At Least 1 For Every Audit Procedure Category Type Inspection 1. Inspection of Tangible Assets (physical examination) 3. Inspection of Documents/Records (documentation) 5. Inspection of Process (observation) Inquiry 4. Inquiries of Client 5. Confirmation Reperformance 6. Reperformance 7. Recalculation Search for Anomalies 8. Analytical Procedures 9. Scanning
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Examples - Inventory Assertion Tested Evidence Type Evidence Physical Examination Directional Test (vouching) Count the inventory in warehouse From general ledger to purchase order Physical Examination Inquiry Evaluate inventory during the counting for obsolete inventory Talk to management about obsolete inventory Confirmation Inquiry Send confirmation to third party warehouse. Check for pending litigation (inquiry from legal council)
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Examples – Inventory (cont’d) Assertion Tested Evidence Type Evidence Directional Test/inspection of Documents (tracing) Trace from purchase order to general ledger.
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