Substantive Tests

12-25 (Types of substantive tests and audit objectives) Audit procedures used in performing substantive tests during the audit of the Harris Company are as follows:
1. Count cash on hand.
2. Confirm accounts receivable.
3. Vouch plant asset additions to purchase documents.
4. Recalculate accrued interest on notes payable.
5. Inquire of management about pledging of plant assets as security for long-term debt.
6. Compute inventory turnover ratio.
7. Vouch ending inventory pricing to purchase invoices.
8. Review client-prepared bank reconciliation.
9. Verify accuracy of accounts receivable balance and agreement with subsidiary ledger.
10. Obtain details of accounts receivable subsidiary ledger and reconcile to the general
11. Compare statement disclosures for leases with GAAP.
12. Review adequacy of client’s provision for uncollectable accounts.
13. Examine certificates of title for delivery equipment.
14. Confirm receivables.
15. Trace bad-debt write-off authorizations to accounts receivable.
16. Observe client’s inventory taking.
17. Trace unpaid vendors’ invoices to accounts payable at year-end.
18. Compare pension disclosures to a disclosure checklist.

For each of the audit procedures, identify (a) the type of substantive test (1—initial procedures, 2—analytical procedure, 3—test of details of transactions, 4—test of details of balances, 5—tests of accounting estimates, or 6—tests of details of disclosures), and (b) one audit objective to which the test relates. Present your answer in columnar form using the following headings:
Audit Procedure (use number) Type of Substantive Test Audit Objective