18. Duplicate copies of bills of lading 252/897 a. Classify each of the preceding items according to type of documentation: (1) Internal or (2) External. b. Explain why external evidence is more reliable than internal evidence. 7-25 (OBJECTIVE 7-4) The following are examples of audit procedures: 1. Inquire of management whether there is any obsolete inventory on hand at the balance sheet date. 2. Examine a sample of vendors' invoices to determine whether the goods or services received are reasonable and of the type normally used by the client's business. 3. Re-compute the unit sales price times the number of units for a sample of duplicate sales invoices and compare the totals with the calculations. 4. Count a sample of 100 inventory items and compare quantity and description to client's counts. 5. Add the sales journal entries to determine whether they were correctly totaled. 6. Foot the sales journal for a one-month period and compare all totals with the general ledger 7. Obtain a letter from the client's attorney addressed to the CPA firm stating that the attorney is not aware of any existing lawsuits. 8. Read the minutes of a board of directors meeting and summarize all information that is pertinent to the financial statements in an audit file. 9. Compute inventory turnover ratios and compare with hose of previous years as a test of inventory obsolescence. 10. Examine an insurance policy stating the amount of the fire insurance coverage on buildings and equipment. 11. Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year. 12. Observe whether the two inventory count teams independently count and record inventory counts. 13. Trace the total in the cash disbursements journal to the general ledger. 14. Scan the sales journal, looking for large and unusual transactions. 15. Vouch a sample of recorded acquisition transactions to vendors' invoices and receiv ing reports. 16. Examine corporate minutes to determine the authorization of the issue of bonds. Required 17. Obtain a letter from management stating that there are no unrecorded liabilities. 18. Review the total of repairs and maintenance for each month to determine whether any month's total was unusually large. Required Classify each of the preceding items according to the eight types of audit evidence: (1) physical examination, (2) confirmation, (3) inspection, (4) analytical procedures, (5) inqui- ries of the client, (6) recalculation. (7) re-performance, and (8) observation