The Following Tests of Controls Are Being Performed on the Audit

question 63

Essay

The following tests of controls are being performed on the audit of Hoppes Homes, Inc. For each test of control, fill in the table to indicate the corresponding control and the purpose of the control.
$\begin{array}{|l|l|l|}\hline \text { Test of Control: } & \text { Description of Control: } & \text { Pupose of Control: } \\\hline \begin{array}{l}\text { 1. Tour the client's storageand } \\\text { production facilities and observe the } \\\text { security features in use for inventory. }\end{array} & \begin{array}{l}\end{array} & \begin{array}{l}\end{array} \\\hline \begin{array}{l}\text { 2. Select a sample of inventory items } \\\text { and examine them for proper category } \\\text { of the records. }\\\end{array} & \begin{array}{l}\end{array}\\\hline \begin{array}{l} \text { 3. Select a sample of overhead } \\ \text { additions made to the cost accounting } \\ \text { records and recalculate for accuracy } \\ \text { and consistency with company policy. } \\\end{array}&\begin{array}{l}\end{array}&\begin{array}{l}\end{array}\\\hline \begin{array}{l} \text {4. Review the inventory records for } \\ \text {evidence that they have been adjusted. } \\ \text {based on the results of the physical } \\ \text { count. } \\\end{array}&\begin{array}{l}\end{array}&\begin{array}{l}\end{array}\\\hline \begin{array}{l} \text {5. Inspect documents identifying any } \\ \text { decline in inventory value and } \\ \text { recalculate for accuracy and } \\ \text { consistency with company policy. } \\\end{array}&\begin{array}{l}\end{array}&\begin{array}{l}\end{array}\\\hline\end{array}$

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Definitions:

Seligman's Theory

Pertains to the theory of learned helplessness initially and later the development of positive psychology, emphasizing strengths, well-being, and the factors that contribute to a fulfilling life.

Trust

A psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another.

Learned Helplessness

A condition in which an individual learns to feel powerless and stops trying to change or escape from a situation, believing that no actions will result in change, often arising from repeated failures or lack of control.

Depression

A psychological condition defined by a continuously low mood or lack of enthusiasm for activities, leading to considerable disruption in everyday functioning.