2. The following are sales, cost of sales, and inventory data for a company, a wholesale distributor of car accessories. Dollar amounts are in millions. (30 points)
3. You are auditing general cash for a company for the fiscal year ended September 30, 2014. The client has not prepared the September 30 bank reconciliation,. After a brief discussion with the owner, you agree to prepare the reconciliation with the assistance from one the company’s clerks. You obtain the following information: (30 points)
4. Below are 3 audit procedures commonly performed during an audit: (20 points)
1. Read the client’s physical inventory instruction and observe whether they are being followed by those responsible for counting the inventory.
2. Compare the client’s count of physical inventory at an interim date with the perpetual inventory master file.
3. Account for a sequence of raw material requisitions and examine each requisition for an authorized approval.
Required:
a. For each procedure, identify which of the following is it:
(1) Test of control
(2) Substantive test of transactions.
b. For those procedures, identify, what transaction-related audit objective or objectives are being satisfied?
5. Distinguish between Prepayments and Accruals (10 points)
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