Below Are 12 Audit Procedures

Below are 12 audit procedures. Classify each procedure according to the following types of audit evidence: 1) inspection, 2) external confirmation, 3) recalculation, 4) observation, 5) inquiry of the client, 6) reperformance, and 7) analytical procedure.
$$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Type of } \\\text { Evidence }\end{array} & \text { Audit Procedures } \\\hline & \text { 1. Watch client employees count inventory to determine whether } \\& \text { company procedures are being followed. } \\\hline & \text { 2. Count inventory items and record the amount in the audit } \\& \text { working papers. } \\\hline & \begin{array} { l } \text { 3. Stand by the payroll time clock to determine whether any } \\\text { employee "punches in" more than one time. }\end{array} \\\hline & \begin{array} { l } \text { 4. Calculate the ratio of cost of goods sold to sales as a test of } \\\text { overall reasonableness of gross margin relative to the preceding } \\\text { year. }\end{array} \\\hline & \begin{array} { l } \text { 5. Obtain information about the client's internal controls by asking } \\\text { questions of client personnel. }\end{array} \\\hline & \begin{array} { l } \text { 6. Trace totals from the cash disbursements journal to the general } \\\text { ledger. }\end{array} \\\hline & \begin{array} { l } \text { 7. Examine a piece of equipment to make sure a recent purchase } \\\text { of equipment was actually received and is in operation. }\end{array} \\\hline & \begin{array} { l } \text { 8. Review the total of repairs and maintenance for each month to } \\\text { determine whether any month's total was unusually large. }\end{array} \\\hline & \text { 9. The auditor computes the debt covenant based on the financial } \\\text { information to ensure that the client's calculation was performed } \\\text { correctly. } & \text { 10. Re-foot entries in the sales journal to determine whether they } \\& \text { were correctly totalled by the client. } \\\hline & \begin{array} { l } 11 . \text { Make a surprise count of petty cash to verify that the amount } \\\text { of the petty cash fund is intact. }\end{array} \\\hline \begin{array} { l } 12 . \text { Obtain a written statement from the client's bank stating the } \\\text { client'syear-end balance on deposit. }\end{array} \\\hline\end{array}$$

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1.Observation 7.Inspection
2.Inspection ...

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