Arshg7Arshg7 asked 5 months ago
  1. As the external auditor of Olive Co, you have performed analytical procedures which have highlighted a 36% increase in purchases compared to the previous period. Olive Co manufactures tools required for heavy machinery and the year under audit is 31 March 2018. Which further audit procedures would you perform in response to this?
  2. For a sample of purchase invoices around the period end, inspect the dates and compare with the dates of goods received notes and the dates recorded in the purchases and payables to confirm the application of correct cut-off.
  3. Trace a sample of shipping documentation to purchases invoices and into the purchases and payables
  4. For a sample of purchase transactions recorded in the ledger, vouch the purchase invoice back to supplier orders and shipping
  5. For a sample of purchase invoices, examine for proper classification into purchase accounts.


  1. Procedure (1) and (2)
  2. Procedure (1) and (3)
  3. Procedure (2) and (4)
  4. Procedure (3) and (4)

Why not C Why b

1 Answers
RaviRavi Staff answered 5 months ago

worried about increased sale, risk of fake sales, problem of overstatement
1 and 3  is answer
2 — shipping document to purchase invoice — for completeness, not overstatement
4– checking proper account is debited for purchase again not focused on overstatement   

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