DISCUSSION QUESTIONS AND PROBLEMS 12-21 conjectives 12-1, 12-2) The following are 11 audit procedures taken from an ad program: 1. Select items from inventory records and examine items in the warehouse 2. Perform test of reasonableness on depreciation expense of equipment items taking into account their remaining useful lives, additions, and disposals during the peur, 3. Contact the banks with which the client does business to confirm the cash balances loan balances, and the outstanding banking facility. 4. Use audit software to foot and cross-foot the cash disbursement journal and a totals to the general ledger, 5. Examine evidence to check whether customer orders have been approved for and by the credit manager 6. Discuss the probability of losing an ongoing court case and the likely compensa amount with the client's legal counsel. 7. Select samples of payroll records and compute the overtime payment the accountant. & Observe the endorsement of incoming checks by the accountant. e Conduct a count for the petty cash kept in the office to verify the amount counted by 10. Interview the sales manager and the credit manager to understand if there is a segregation of duties between the credit-granting function and the sales function. 11. Divide individual manufacturing expenses by total manufacturing expenses and compare the results with those in previous years to check for unusual fluctuations. 2. Indicate whether each procedure is a test of control, substantive test of transac- Required tions, substantive analytical procedure, or a test of details of balances. b. Identify the type of evidence for each procedure