True or false

1. When auditing financial statements auditors usually choose either a control reliance or substantive testing audit strategy. 2. To test accounting records for sales that have been recorded but for which there have been no actual shipments to date, the auditor would attempt to trace a selected shipping document to the sale invoice in the sales journal.

3. To test for shipments made but not invoiced to customers, the auditor would attempt to trace from a selected shipping document to the sales invoice in the sales journal.

4. The main reason that auditors confirm a clients accounts receivable is to determine whether the accounts receivable balance exists.

5. Sample sizes for substantive tests usually decrease when the degree of reliance on internal controls decreases.

6. Tests of internal control are one type of substantive audit procedure.

7. Payroll expense is usually audited using tests of detail versus relying on internal controls in the payroll system. 8. Payroll policies should require competent but different persons to recalculate hours worked, ensure all overtime is approved and review payroll time cards for erasures and alterations.

9. Accounting for the numerical sequence of sales invoices is an example of an analytical review procedure performed by an auditor.