Integrated Case

1234 Words May 5th, 2013 5 Pages
Key Controls | Transaction-Related Audit Objective | Test of Control | Substantive Test of Transaction | 1. Segregation of the purchasing, receiving, and cash disbursements functions. | Recorded acquisitions are for goods & services received. (Occurrence)Recorded cash disbursements are for goods & services received. (Occurrence) | Discuss with personnel & observe activities. | Review the acquisitions journal, general ledger, and accounts payable master file for large or unusual amounts. | 2. Independent reconciliation of the monthly bank statements. | Existing cash disbursement transactions are recorded. (Completeness)Recorded cash disbursement transactions are accurate. (Accuracy) | Examine bank …show more content…
| 6. Internal verification of document package before check preparation. | Recorded acquisitions are for goods & services received. (Occurrence)Recorded acquisitions transactions are accurate. (Accuracy)Acquisitions transactions are correctly included in the A/P and inventory master files & are correctly summarized.(Posting & Summarization)Acquisition transactions are correctly classified. (Classification)Acquisition transactions are recorded on the correct date. (Timing) | Examine document package for indication of internal verification. | Review the acquisitions journal, general ledger, and accounts payable master file for large or unusual amounts.Compare recorded transactions in the acquisitions journal with the vendor’s invoice, receiving report, and other supporting documentation.Test clerical accuracy by footing the journals and tracing postings to general ledger and accounts payable and inventory master files.Compare classification with chart of accounts by referring to vendors’ invoices.Compare dates of receiving reports and vendors’ invoices with dates in the acquisitions journal. | 7. Review of supporting documents and signing of checks by an independent, authorized person. | Recorded cash disbursements are for goods & services actually received. (Occurrence) | Discuss with personnel and observe activities. | Trace the cancelled check to the related acquisitions journal entry and examine for payee name and amount. |