Part 7 Audit Philosophy and Direction of Tests 30 points) We considered broad "accounting systems" involving the Sales Cycle AND Inventory Observation to illustrate the direction of testing involving the test for overstatement or understatement Requirements: 1. Consider THREE ADJACENT pieces of the sales cycle [do NOT use 2. In a physical inventory observation, discuss the proper 3. The double-entry accounting aystem conceptually can be used to Sales Order and discuss the proper direction of testing for Sales for OVERstatement direction when taking test counts to test for OVERstatement of inventory gain audit efficiencies. Use "journal entries" and explain how (A) Accounts receivable is tested for understatement by gathering evidence about another account; and (B) how a liability is tested tor overstatement by gathering evidence about another account 4. What type of evidence is used to test sales for overstatement? 1. Sales for OVERstatement 2. Physical Inventory teating for OVERstatement 3A. Journal entries& Discussion. Accounts receivable Eor UNDERstatement B Journal entries& Discussion. A liability for OVERstatement 4. Type of evidence: Sales for OVERstatement Part 7 Audit Philosophy and Direction of Tests 30 points) We considered broad "accounting systems" involving the Sales Cycle AND Inventory Observation to illustrate the direction of testing involving the test for overstatement or understatement Requirements: 1. Consider THREE ADJACENT pieces of the sales cycle [do NOT use 2. In a physical inventory observation, discuss the proper 3. The double-entry accounting aystem conceptually can be used to Sales Order and discuss the proper direction of testing for Sales for OVERstatement direction when taking test counts to test for OVERstatement of inventory gain audit efficiencies. Use "journal entries" and explain how (A) Accounts receivable is tested for understatement by gathering evidence about another account; and (B) how a liability is tested tor overstatement by gathering evidence about another account 4. What type of evidence is used to test sales for overstatement? 1. Sales for OVERstatement 2. Physical Inventory teating for OVERstatement 3A. Journal entries& Discussion. Accounts receivable Eor UNDERstatement B Journal entries& Discussion. A liability for OVERstatement 4. Type of evidence: Sales for OVERstatement