For each of the following audit procedures, state which type of evidence-gathering technique is being used: (1) inspection or (2) computation or (3) confirmation or (4) analytical procedures or (5) enquiries or (6) observation.Agreeing the total of the accounts receivable subsidiary ledger to the accounts receivable general ledgerDiscussing the adequacy of the allowance for doubtful debts with the credit manager.Comparing the current year gross margin with the gross margin for the last four years.Examining a new machine to ensure that this major acquisition wasWatching the client’s warehouse personnel count the raw materialsPerforming test counts of the warehouse personnel’s count of the rawObtaining a letter from the client’s solicitor indicating that there were no lawsuits in progress against theTracing the prices used by the client’s billing program for pricing sales invoices to the client’s approved priceSending a written request to the client’s customers requesting that they report to the auditor the amount owed to theExamining large sales invoices for a period of two days before and after year-end to determine if sales are recorded in the proper accounting

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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For each of the following audit procedures, state which type of evidence-gathering technique is being used: (1) inspection or (2) computation or (3) confirmation or (4) analytical procedures or (5) enquiries or (6) observation.

Agreeing the total of the accounts receivable subsidiary ledger to the accounts receivable general ledger
Discussing the adequacy of the allowance for doubtful debts with the credit manager.
Comparing the current year gross margin with the gross margin for the last four years.
Examining a new machine to ensure that this major acquisition was
Watching the client’s warehouse personnel count the raw materials
Performing test counts of the warehouse personnel’s count of the raw
Obtaining a letter from the client’s solicitor indicating that there were no lawsuits in progress against the
Tracing the prices used by the client’s billing program for pricing sales invoices to the client’s approved price
Sending a written request to the client’s customers requesting that they report to the auditor the amount owed to the
Examining large sales invoices for a period of two days before and after year-end to determine if sales are recorded in the proper accounting

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