DietWeb Inc. (hereafter DietWeb) was incorporated and began business in March of

Question

DietWeb Inc. (hereafter DietWeb) was incorporated and began business in March of 20X1, seven years ago. You are working on the 20X8 audit - your CPA firm's fifth audit of DietWeb. For each audit objective, select a substantive procedure that would help to achieve that objective. Enter the appropriate capital letter in the space provided. Each of the procedures may be used once, more than once, or not at all.

. Trace opening balances in the summary schedules to the prior year's audit working papers. B. Review the provision for depreciation expense and determine that depreciable lives and methods used in the current year are consistent with those used in the prior year. C. Determine that responsibility for maintaining the property and equipment records is segregated from the responsibility for custody of property and equipment. D. Examine deeds and title insurance certificates. E. Perform cutoff test to verify that property and equipment additions are recorded in the proper period. F. Determine that property and equipment is adequately insured. G. Physically examine a sample of recorded beginning property items and all recorded major property and equipment additions. H. Analyze repairs and maintenance expense.

Explanation / Answer

Point Procedure 1 D F C 2 C 3 A B G H 4 E 5 A B G 6 A C H

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