paring the bank reconciliation. 2. Examine vendors’ invoices and other s
a. Indicate whether each procedure, given below, is a test of control, substantive test of transactions, substantive analytical procedure, or a test of details of balances.
b. Identify the type of evidence for each procedure.
The following are 11
1. Discuss the duties of the cash disbursements clerk with him and observe whether he has responsibility for handling cash or preparing the bank reconciliation.
2. Examine vendors’ invoices and other supporting documents to determine whether
large amounts in the repair and maintenance account should be capitalized.
3. Inquire about the accounts payable supervisor’s monthly review of a computer-generated exception report of receiving reports and purchase orders that have not been matched with a vendor invoice.
4. Foot the accounts payable
5. Confirm accounts payable balances directly with vendors.
6. Account for a sequence of checks in the cash disbursements journal to determine
whether any have been omitted.
7. Examine vendors’ invoices to verify the ending balance in accounts payable.
8. Compare the balance in payroll tax expense with previous years. The comparison
takes the increase in payroll tax rates into account.
9. Examine the internal auditor’s initials on monthly bank reconciliations as an indication of whether they have been reviewed.
10. Examine vendors’ invoices and other documentation in support of recorded transactions in the acquisitions journal.
11. Multiply the commission rate by total sales and compare the result with commission expense.
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