With the double entry accounting system, testing one account balance produces audit evidence concerning another account balance or class of transactions. For example, testing for overstatement of current marketable securities may uncover an understatement of long-term investments due to a misclassification, which would affect the presentation and disclosure assertion.
For each of the following tests of account balances, indicate at least two other account balances or classes of transactions for which evidence is also provided and the related management assertions that would be affected by the tests.
1 Testing inventory for overstatement (E (Existence) and VA (Valuation and Allocation))
2 Testing revenue for understatement (CO (Completeness)).
3 Testing accounts receivable for overstatement (E).
4 Testing accrued salaries for understatement (CO)
5 Testing repairs and maintenance expense for overstatement (E).
6 Testing the adequacy of the allowance for doubtful accounts (VA).