The Auditor Determines That Each of the Following Objectives Will

question 41

Essay

The auditor determines that each of the following objectives will be part of your audit of Bozington Co., Inc. For each audit objective, select a substantive procedure that would help to achieve that objective. Each of the procedures may be used once, more than once, or not at all.
Audit Objective
1. Establish the completeness of inventories.
2. Establish the accuracy of cost amounts of inventories.
3. Determine that the presentation and disclosure of inventories and cost of goods sold is adequate.
4. Establish that the client has rights to the recorded inventories.
5. Establish the existence of ending inventory. Substantwe Proceciures
a. Examine current vendors' price lists.
b. Review drafts of the financial statements.
c. Select a sample of items during the physical inventory count and determine that they have been included on count sheets.
d. Select a sample of rec orded items and examine supporting vendors' inwoices and contracts.
e. Select a sample of rec orded tems on count sheets during the physical inventory count and determine that itemsare on hand.
t. Test the reasonableness of general and administrative labor rates.

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Definitions:

Health Insurance

A kind of insurance policy that reimburses the insured for their medical and surgical bills.

Equilibrium Price

The equilibrium price in the market, where the quantity of items provided meets the quantity of items consumers wish to buy.

Health Insurance

A form of insurance coverage that pays for an individual's medical and surgical expenses.

Defensive Medicine

Medical practices conducted by a physician to avoid malpractice litigation rather than to benefit the patient's health.