AUDIT QUESTION

Please explain your answer in great detail. Thank you in advance!

An audit associate is preparing an audit program for the audit of a clients inventory purchases transactions. To gather evidence in support of the cutoff assertion, the associate included the following audit procedure in the audit program: Select a sample of receiving reports in the warehouse for three days before and after year-end and inspect related journal entries in inventory/accounts payable to determine that purchases were recorded in the proper period.

REQUIRED:

a) Evaluate the relevance of the procedure in addressing the cutoff assertion.

b) Comment on the reliability of the evidence gathered using the procedure.