Question 7

From the following descriptions, determine what type of auditing procedure is being conducted:

1. The auditor watched two employees open the safe with their respective codes.
2. The amount of depreciation on the company vehicles was recalculated.
3. The auditor confirmed the journal and ledger entries for a purchases receipt were correctly made.
4. The auditor went to the entitys warehouse to examine the existence and condition of inventory.
5. The auditor took a stocktake of inventory on the shelf.
6. The auditor used the computer to randomly select a sample of accounts receivable for confirmation.
7. The auditor receives a letter from the entitys lawyers regarding the total legal fees charged for the period.
8. The auditor sent a letter to the entitys bank asking about the entitys debt covenants.
9. The auditor found the sales invoice and then sales order for an entry made in the accounts receivable ledger.
10. Expected wages expense was determined by proportionately adjusting the previous years wages upwards by the increase in sales and then this was confirmed with the current periods figure for wages expense.

(5 marks)