An Auditor Is Conducting the Audit of the Financial Statements

question 13

Essay

An auditor is conducting the audit of the financial statements of a retail department store.The auditor is aware that he must obtain sufficient appropriate evidence with respect to various audit assertions associated with management assertions and thus with material financial statement amounts.
The following is a list of specific audit procedures the auditor plans to perform:
1.Send negative external confirmation requests to a large sample of the store's customers who have balances due on account at year end.
2.Perform test counts of goods on hand during the company's normal physical inventory taking,one month prior to the year end.
3.Examine receiving reports dated prior to the year end that have not been matched to vendor invoices.
4.Review paid invoices and supporting documents for amounts classified as repair and maintenance expense for large or unusual items.
5.Examine audited financial statements of several foreign companies in which the client owns shares,and which are being held as temporary investments.
Required:
For each of the five audit procedures listed,describe only the PRIMARY management assertion being tested,the PRIMARY audit assertion being tested,and the quality of evidence (high,medium,low)obtained,explaining WHY the evidence is the quality level you specify.

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Definitions:

Academic Major

The specific subject area that a student chooses to focus on during their undergraduate or graduate studies.

Dependent Personality Disorder

A mental health condition characterized by an overwhelming dependence on others to meet emotional and physical needs, often leading to difficulties in everyday functioning.

Population

The entire pool from which a statistical sample is drawn or the total number of people within a defined area considered for purposes of analysis.

Cognitive-Behavioral Therapy

A psychotherapeutic treatment that aims to change patterns of thinking or behavior that contribute to people's difficulties, thereby changing the way they feel.