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Cartwright Enterprises is being audited by Glowbright External Auditors. The lead partner on the audit engagement has assigned the task of auditing the inventory accounts to a senior manager employed by the audit firm. After conversations with the internal audit. 5taft, the senior manager is concerned about the client's net realizable value of inventory on hand, and has decided to employ an ADA (Audit Data Analytics) procedure to investigate any items of inventory that may be taking unusually long to sell. In this contect, the best application of an ADA risk assessment procedure would be (Select all that opply) to investigate the inventory account in the search for anomalies warranting further investigation, which may require a markdown of particular items to lower of cost or net realizable value. to examine a sample of inventory items that the external auditor suspects may be anomalous, and document any low turnover items as proof that these items must be marked down. as a substantive procedure conducted and documented by the internal audit function, with the results forwarded to senior. management for review. to investigate a population of inventory items to ensure that all items are appropriately valued and marked down as may be. necessary. Sunnyside inc. is being audited by Swan and Co. External Auditors. The lead partner on the engagement is interested in utilizing Audit. Data Analytics (ADA) as a substantive test of details, and is discussing the most beneficial use of this technique with the audit manager. who will assume responsibility for the day- to day overseeing of the audit. Scenarios, whereby ADA can be utilized as a substantive test. of details, include: (Select all that applyd Vouching accounts receivable balances to records of subsequent cash receipts from customers. Matching IT internal controls to the relevant audit assertions which will be used to test those controis. Matching intormation contained in shipping documents, bills of lading, and sales invoices. Vouching procedure whereby inventory quantities are matched to depreciation expenses and inventory acquisitions. Stateside External Auditors are currently conducting the audit of Safeway Enterprises; a large, decentralized client with seasonal variations in revenue and operations throughout the United States. As part of their risk assessment procedures, Stateside has decided to utilize a regression analysis in order to analyze Safeway's revenue accounts. Regression anatysis is wefl suited to an investigation of this nature because: (Select all that apply) Regression analysis can help the auditor discover anomalous items which may be worthy of further imvestigation. Regression analysis can be used as a substitute for other, more time-consuming substantive procedures. The prediction equation generated by the regression analysis will ensure that all unacceptable variations are removed from the analysis to ensure the robustness of the statistical test. Regression analysis can incorporate the seasonality of the client's business into the prediction equation
