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AP9.5 (LO 3, 4) Persuasiveness of evidence from substantive analytical procedures Iman has the task of reviewing the evidence from substantive analytical procedures conducted by
AP9.5 (LO 3, 4) Persuasiveness of evidence from substantive analytical procedures Iman has the task of reviewing the evidence from substantive analytical procedures conducted by the audit associates on the audit of Smalley 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 Iman, 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.
- c. For each item, discuss how ADA could be used as a risk assessment procedure or as a substantive test. Explain the evidence used to support an audit conclusion.
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