Below Are Five Audit Procedures, All of Which Are Tests

question 93

Short Answer

Below are five audit procedures, all of which are tests of transactions associated with the audit of the acquisition and payment cycle. Also, below are the six general transaction-related audit objectives and the five management assertions. For each audit procedure, indicate (1) its audit objective, and (2) the management assertion being tested.
1. Foot the purchases journal and trace the totals to the related general ledger accounts.
(1) ________
(2) ________
2. Recompute the cash discounts taken by the client.
(1) ________
(2) ________
3. Compare dates on cancelled checks with the bank cancellation date.
(1) ________
(2) ________
4. Trace from a sample of cancelled checks to the cash disbursements journal.
(1) ________
(2) ________
5. Examine supporting documentation for a sample of transactions for authorized payee and amount and to determine services or goods were received.
(1) ________
(2) ________

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Definitions:

Corporation

A legal entity that is separate from its owners, providing them with limited liability and the ability to raise capital by issuing shares.

Intangible Property

Assets that do not have a physical presence but hold value, such as copyrights, patents, trademarks, and goodwill.

Tangible Property

Tangible Property consists of physical assets that can be touched and seen, such as land, buildings, and personal property.

Tax Purposes

The specific reasons or objectives related to the calculation and payment of taxes, often influencing financial decisions and accounting practices.