Question

ou are provided with a series of audit procedures as follows:
a)    Test the conversion rates for any foreign currency balances.
b)    Confirm with suppliers that amounts reflected in accounts payable are obligations owed by the entity.
c)    Select a sample of sales invoices and trace through to sales journal and general ledger.
d)    Read draft financial report to ensure that disclosures are clear and understandable.
Required:
For each audit procedure: 1) state the management assertion tested by the procedure, and 2) indicate what specific type of audit procedure is described in each scenario (e.g. observation or inquiry of management).    

Please number your answers clearly.

Answer 1

Audit Procedure	Management assertion tested	Type of audit procedure
a) Test the conversion rates for any foreign currency balances	Accuracy and Valuation	Recalculation
b) Confirm with suppliers that amounts reflected in accounts payable are obligations owed by the entity.	Existence and Rights & Obligations	Confirmation
c) Select a sample of sales invoices and trace through to sales journal and general ledger.	Completeness	Inspection
d) Read draft financial report to ensure that disclosures are clear and understandable	Classification and Understandability	Test of details of Disclosures –Substantive procedures