Question
8.31 Persuasiveness of evidence from analytical procedures Matthew has the task of reviewing the evidence from substantive analytical testing conducted by the audit associates on
8.31 Persuasiveness of evidence from analytical procedures
Matthew has the task of reviewing the evidence from substantive analytical testing conducted by the audit associates on the audit of Smally Services Inc. The audit associates have reported the results of these substantive analytical procedures:
1. Comparison of depreciation expense with the closing balance of each depreciable asset class in property, plant, and equipment.
2. Recalculation of sales commission expenses using the standard sales commission rate and total sales.
3. Comparison of payroll expense with previous year payroll.
Required
(a) If you were Matthew, what review comments/questions would you have for each procedure? Comment on the persuasiveness of evidence provided by each one.
(b) For each item, describe one test of details that would provide additional evidence.
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