Requirement Classify each of the items according to the eight types of audit evidence: (1) physical examination, (2) confirmation, (3) inspection, (4) analytical procedures, (5) inquiries of the client, (6) recalculation, (7) reperformance, and (8) observation. iries of the client 7. Add the sales journal entries to determine whether they were correctly totaled. Obtain a letter from the client's attorney addressed to the CPA firm stating that the 8. attorney is not aware of any existing lawsuits. Extend the cost of inventory times the quantity on an inventory listing to test whether it - 9. is accurate. Obtain a letter from an insurance company to the CPA firm stating the amount of the fire 10. insurance coverage on buildings and equipment. Examine an insurance policy stating the amount of the fire insurance coverage on 11. buildings and equipment. Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of 12. gross margin relative to the preceding year. Type of Audit Evidence Examples of Audit Procedures Obtain information about internal control by requesting the client to fill out a 13. questionnaire. 14. Trace the total in the cash disbursements journal to the general ledger. Examine a piece of equipment to make sure that a major acquisition was actually 15. received and is in operation. 16. Examine corporate minutes to determine the authorization of the issue of bonds. 17. Obtain a letter from management stating that there are no unrecorded liabilities Review the total of repairs and maintenance for each month to determine whether any 18. month's total was unusually large. Requirement Classify each of the items according to the eight types of audit evidence: (1) physical examination, (2) confirmation, (3) inspection, (4) analytical procedures, (5) inquiries of the client, (6) recalculation, (7) reperformance, and (8) observation. iries of the client 7. Add the sales journal entries to determine whether they were correctly totaled. Obtain a letter from the client's attorney addressed to the CPA firm stating that the 8. attorney is not aware of any existing lawsuits. Extend the cost of inventory times the quantity on an inventory listing to test whether it - 9. is accurate. Obtain a letter from an insurance company to the CPA firm stating the amount of the fire 10. insurance coverage on buildings and equipment. Examine an insurance policy stating the amount of the fire insurance coverage on 11. buildings and equipment. Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of 12. gross margin relative to the preceding year. Type of Audit Evidence Examples of Audit Procedures Obtain information about internal control by requesting the client to fill out a 13. questionnaire. 14. Trace the total in the cash disbursements journal to the general ledger. Examine a piece of equipment to make sure that a major acquisition was actually 15. received and is in operation. 16. Examine corporate minutes to determine the authorization of the issue of bonds. 17. Obtain a letter from management stating that there are no unrecorded liabilities Review the total of repairs and maintenance for each month to determine whether any 18. month's total was unusually large