Question

Identify the type of audit evidence used for each audit procedure.

Identify the general balance-related audit objective or objectives satisfied by each audit procedure.

Audit procedure:

Trace selected quantities from inventory list to the physical inventory to make sure that it exists and the quantities are the same.

a) Type of Audit Evidence: Confirmation; Balance-Related Audit Objectives: Valuation.
b) Type of Audit Evidence: Inspection of Documents; Balance-Related Audit Objectives: Existence and Completeness.
c) Type of Audit Evidence: Reperformance; Balance-Related Audit Objectives: Valuation.
d) Type of Audit Evidence: Physical Examination; Balance-Related Audit Objectives: Existence and Accuracy.

Answer 1

The audit evidence type for tracing inventory quantities is physical examination, which satisfies the existence and accuracy balance-related audit objectives.

Step-by-step explanation:

The type of audit evidence used in the procedure of tracing selected quantities from the inventory list to the physical inventory to ensure its existence and that the quantities are the same is known as physical examination. This kind of evidence involves the auditor directly checking the inventory to verify the items are present and in the quantity stated. The general balance-related audit objectives satisfied by this procedure are existence and accuracy, ensuring that the inventory listed on the financial statements actually exists and that the quantity and condition are accurately recorded.