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Identify Whether the Following Tests Are Substantive Analytical Procedures, Tests

question 10

Essay

Identify whether the following tests are substantive analytical procedures, tests of details of transactions, or tests of details of account balances:
1)Test a sample of purchase requisitions for proper authorization.
2)Test transactions around year-end to determine if they are recorded in the proper period.
3)Review results of confirmation of selected accounts payable.
4)Compare payables turnover to previous years' data.
5)Obtain selected vendors' statements and reconcile to vendor accounts.
6)Compare purchase returns and allowances as a percentage of revenue or cost of sales to industry data.


Definitions:

Similar Investments

Investments that share comparable characteristics, risk profiles, or potential returns, facilitating the comparison and portfolio diversification.

Annual Dividend

Annual dividend refers to the total dividend payment a shareholder receives per share of stock owned in a company over the course of a year.

Rate of Return

The outcome, whether gainful or not, of an investment throughout an established period, expressed as a percentage of the investment's purchase cost.

Annual Dividend

A financial distribution made by a corporation to its shareholders, usually once or multiple times a year, from its earnings.

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