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. |
FUTRONICS Inc. is a private company located in Lexington mainly categorized for modems, monitors, disk drives and terminals. It is moreover in to sales and services. This case is about the replacement of Futronics’s central office stores by an outside service provider. In this case supply management manager have an opportunity for investigating selected outsourcing in-house services.
The activity register contains a history of all supply and property transactions. These include open and closed transactions that are tracked by serial number. The function provides the capability to search, view and/or print a report of these transactions, to reverse receipt or asset adjustment transactions that were input erroneously, and to view input transactions.
SMW’s current accounting information system is a cutting edge relational database system through Microsoft Access with internal controls set to adequately prevent and detect errors and fraud. This relational database system tracks sales orders, shipments, accounts receivable, cash receipts, purchases, accounts payable, cash disbursements, inventory levels and other relevant accounting information. The system’s output is compliant with Generally Accepted Accounting Principles (GAAP). The database processes currently in use at SMW are described below.
This control is directly related to the accuracy transaction-related audit objective for sales. The auditor might test the effectiveness of this control by examining a sample of duplicate sales invoices for the clerk’s initials indicating that the unit selling price was verified.
The next step is to look at all the canceled checks and see if anyone else is involved in the fraud. Also see if any checks were signed over to a different account.
The entries used to record the disposition when the receivables are sold to a factor often detail the cash received plus the service charge. The company can then balance their receivables account. When a credit card company records a credit card
The Business Record Certification Statement (Exhibit C-10) was provided to show that the EBT transactions the OIG used to create their analysis were complete and unaltered as shown in the Xerox database. The ALJ finds that these documents show how the OIG determined an average
* Photocopies of fronts of two checks payable to Lisa (for $61.00 and 478.29) but the canceled checks were not able to be located or find evidence that it cleared IBC’s bank account. (508)
Performed oversight assessment of Contractor's Purchase Card (P-Card) procedures reviewed for detection of fraud, waste, and abuse, resulting in tighter internal controls (less card holders) and updates in contractor’s policies and procedures; Recommendations were made regarding safety and morale functions and incentives, and policies have been amended to tighten internal controls and to conform to federal regulations; Details given to federal lead for advice on performance fees of cost plus type contracts; Provided guidance to program managers and accountants on changes in law, policies, and procedures.
b. Prepare a control risk matrix for acquisitions and a separate one for cash disbursements using Figure 10-5 on page 308 as a guide. A formatted control risk matrix is provided on the textbook Web site. The objectives should be specific transaction-related audit objectives for acquisitions for the first matrix and cash disbursements for the second matrix. See pages 608–612 in Chapter 18 for transaction-related audit objectives for acquisitions and cash disbursements. In doing Part III, the following steps are recommended:
Read each transaction and record the appropriate journal entry for Morrison Consultants, which has a June 30 year end. Explanations are NOT required. 1. On June 30 2011, Morrison prepares an aging schedule of accounts receivable that shows estimated uncollectible accounts of $5,200. Before journal entries, the Allowance for Doubtful accounts has a debit balance of $300 and Accounts Receivable has a balance of $85,000. 2. On July 5, Morrison was notified that Sperry Ltd has declared bankruptcy and Morrison writes off its A/R
A register of property, plant and equipment showing transactions and balances in relation to individual items
It is the difference between cash receipts and cash disbursements from providing goods and services.
Checking of payments petty cash, purchase journal, store issue, journal & Credit vouchers and sale invoices.
I understand that the payment was paid to a certain person in order to secure the contract and maximize the wealth of our company. According to the relevant regulations and rules provided by both