Question

Which of the following audit procedures represents a test of details (also referred to as “detail test”)?

Examine the internal auditor’s initials on monthly bank reconciliations as an indication of whether they have been reviewed

Confirm accounts payable balances directly with vendors

Inquire about the accounts payable supervisor’s monthly review of a computer-generated exception report of receiving reports and purchase orders that have not been matched with a vendor invoice

Examine vendors’ invoices and other documentation in support of recorded transactions in the purchase journal

Answer 1

Answer:

Tests of details are the procedures are used by auditors to collect the evidence that the balances, disclosures and underlying transactions associated with a client's financial statements are correct.

Following audit procedures represent tests of details:

1.Confirming accounts payable balances directly with vendors as it involves collection of evidence

2.Examine vendors invoices and other documentation in support of recorded transactions in the purchase journal.