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:

Examine sales invoices and contracts with customers to determine whether any goods are out on consignment with customers. Similarly, examine vendors' invoices and contracts with vendors to determine whether any goods on the inventory listing are owned by vendors.

a) Type of Audit Evidence: Confirmation; Balance-Related Audit Objectives: Existence.
b) Type of Audit Evidence: Inspection of Documents; Balance-Related Audit Objectives: Existence and Valuation.
c) Type of Audit Evidence: Observation; Balance-Related Audit Objectives: Valuation.
d) Type of Audit Evidence: Analytical Procedures; Balance-Related Audit Objectives: Completeness.

Answer 1

The type of audit evidence used for...and ensure accurate valuation.

Step-by-step explanation:

The type of audit evidence used for the audit procedure of examining sales invoices and contracts with customers to determine whether any goods are out on consignment with customers is Confirmation. This involves obtaining a direct response from the customer to verify the existence of the consigned goods. The balance-related audit objective satisfied by this procedure is Existence because it confirms that the goods actually exist.

The type of audit evidence used for the audit procedure of examining vendors' invoices and contracts with vendors to determine whether any goods on the inventory listing are owned by vendors is Inspection of Documents. This involves reviewing the invoices and contracts to verify the ownership of the goods. The balance-related audit objectives satisfied by this procedure are Existence and Valuation because it confirms the existence of the goods and ensures they are accurately valued.