For each audit procedure described:
a. Identify the objective of the procedure or the audit assertion being tested.
b. Classify the procedure as primarily a substantive test, a test of controls, or both.
1. The auditor examines payments to vendors following year end and then reviews any open accounts payable files.
2. The auditor reviews computer-center records on changes to passwords and the client's procedures to monitor unusual amounts of accesses by password type. The auditor makes inquiries of purchasing agents about how often passwords are changed, and whether assistants are allowed to access computer files in their absence in order to efficiently handle inquiries or process standing orders.
3. The auditor reviews a report of all accounts payable items that were not matched by the automated matching system, but had been paid upon authorization of the accounts payable department. A sample of selected items is taken and traced to the vendor payment and supporting documentation.
4. The auditor uses software to prepare a report of all debits to Accounts Payable other than payments to vendors. A sample of the debits is selected and examined for support.
5. The auditor uses software to access all recorded receipts of merchandise that have not been matched to an open purchase order.
6. The client prepares a report from a database showing inventory write-downs by product line and by purchasing agent. The auditor reviews the report and analyzes the data in relation to sales volume by product.
7. The auditor creates a spreadsheet showing the amount of scrap generated monthly, by product line.
8. The auditor downloads client data to create a report showing monthly sales and inventory levels, by product line.
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