Question

Which of the following audit procedures would an auditor be least likely to perform using a generalized audit software?

1) Searching records of accounts receivable balances for credit balances.
2) Investigating inventory for possible damaged goods.
3) Selecting accounts receivable for positive and negative confirmations.
4) Listing of unusually large inventory balances.

Answer 1

An auditor would be least likely to use generalized audit software to investigate inventory for possible damaged goods. This task is more suited to physical inspection rather than data analysis. Other options mentioned are more data-centric and suited for software use.

Step-by-step explanation:

The student question concerns the usage of generalized audit software (GAS) in various audit procedures. It is least likely for an auditor to use GAS for investigating inventory for possible damaged goods (option 2). This task often requires physical inspection and cannot be thoroughly performed using software tools alone. GAS is more suited for tasks that involve data analysis and manipulation, such as searching for credit balances in accounts receivable, selecting accounts for confirmations, and listing large inventory balances, which are more data-centric tasks.

In the context of the self-check questions regarding the degree of imperfect information in various purchase scenarios:

1. Buying apples at a roadside stand would typically involve relatively low imperfect information because the buyer can directly inspect the fruit.
2. Buying dinner at a neighborhood restaurant might also have a relatively low degree of imperfect information, assuming the restaurant's quality is known through prior experience.
3. Buying a used laptop at a garage sale would present a relatively high degree of imperfect information, considering potential hidden defects and lack of warranty.
4. Ordering flowers over the internet for a friend would involve a relatively high level of imperfect information due to the inability to inspect the flowers personally.