Financial Statement Assertions and Audit Procedures For each of the accounts balances and associated assertions below, select the audit procedure from the list provided that gives the most appropriate audit evidence for the account assertion Accounts Balance Assertion Procedure Inventory Completeness Examine invoices from suppliers Examine invoices paid subsequent to year end and trace to subsidiary ledger Select items located in the inventory warehouse and trace to the inventory listing Trace sales invoices and shipping documents just after year end to customer accounts Cash Rights and obligations Agree bank statement to the subsidiary ledger Agree the cash balance per the bank reconciliation to the year end bank statement Review the bank confirmation for information on compensating balances Trace deposits per the bank statement to the cash subsidiary ledger Accounts Receivable Existence Review confirmation of accounts receivable balances and agree to accounts receivable subsidiary ledger Review list of accounts written off during the year Review schedule of bad debt expense Trace sales invoice and shipping documents just before year end to customer accounts Accrued Payroll Cut off Review union agreements and recalculate the payroll expense based on the union wage rates Perform analytical procedures comparing the current year payroll expense to the prior year Review time cards for the period of one week before and after year end and compare to managements computation of wages not paid as of year end Compare the wages reported on form 941 to the IRS to wages indicated on the general ledger Fixed Assets Valuation Compare the useful lives assigned to new fixed asset purchases to useful lives assigned in prior years to similar assets Vouch new additions back to the invoices, cancelled check and properly approved purchase order Trace fixed assets observed to the fixed asset master control listing Interview the plant manager regarding repair and maintenance expenses

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Posted on Aug 02, 2024

. Financial Statement Assertions and Audit Procedures For each of the accounts balances and associated assertions below, select the audit procedure from the list provided

. Financial Statement Assertions and Audit Procedures

For each of the accounts balances and associated assertions below, select the audit procedure from the list provided that gives the most appropriate audit evidence for the account assertion.

Accounts Balance	Assertion	Procedure
Inventory	Completeness	Examine invoices from suppliers. Examine invoices paid subsequent to year-end and trace to subsidiary ledger. Select items located in the inventory warehouse and trace to the inventory listing. Trace sales invoices and shipping documents just after year-end to customer accounts.
Cash	Rights and obligations	Agree bank statement to the subsidiary ledger. Agree the cash balance per the bank reconciliation to the year-end bank statement. Review the bank confirmation for information on compensating balances. Trace deposits per the bank statement to the cash subsidiary ledger.
Accounts Receivable	Existence	Review confirmation of accounts receivable balances and agree to accounts receivable subsidiary ledger. Review list of accounts written off during the year. Review schedule of bad debt expense. Trace sales invoice and shipping documents just before year-end to customer accounts.
Accrued Payroll	Cut-off	Review union agreements and recalculate the payroll expense based on the union wage rates. Perform analytical procedures comparing the current year payroll expense to the prior year. Review time cards for the period of one week before and after year-end and compare to managements computation of wages not paid as of year-end. Compare the wages reported on form 941 to the IRS to wages indicated on the general ledger.
Fixed Assets	Valuation	Compare the useful lives assigned to new fixed asset purchases to useful lives assigned in prior years to similar assets. Vouch new additions back to the invoices, cancelled check and properly approved purchase order. Trace fixed assets observed to the fixed asset master control listing. Interview the plant manager regarding repair and maintenance expenses.