Question 12 (10 marks) The following are 10 audit procedures taken from an audit program: 1. Select items from inventory records and examine those 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 year, and compare the expenses against the amount calculated by client. 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 trace totals to the general ledger. 5. Examine evidence to check whether customer orders have been approved for credit by the credit manager 6. Discuss the probability of losing an ongoing court case and the likely compensation amount with the client's legal counsel. 7. Select samples of payroll records and compute the overtime payment. 8. Observe the endorsement of incoming checks by the accountant. 9. 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. 10. Divide individual manufacturing expenses by total manufacturing expenses and compare the results with those in previous years to check for unusual fluctuations. Required: Identify the type of evidence for each procedure using the following table: inspection of asset, confirmation, inspection of documents, analytical procedures, inquiries, recalculation, reperformance, and observation. (10 marks) Audit Procedures (list out the item numbers) Answer 2 6