Essay about Purchases: Expenditures Processes and Controls

10161 WordsNov 3, 201441 Pages
1ACCOUNTING INFORMATION SYSTEMS CONTROLS AND PROCESSES TURNER / WEICKGENANNT CHAPTER 9: Expenditures Processes and Controls – Purchases TEST BANK - CHAPTER 9 - TRUE / FALSE 1. When the company is a vendor, goods flow into the company and cash is paid out. 2. Companies in the same line of business are not likely to have many differences in their purchasing habits. 3. The purchasing process starts when the purchase invoice is submitted by the vendor. 4. A purchase order is essentially an internal document, one that does not go outside the company, whereas a purchase requisition is an external document, which will be presented to an entity outside the company. 5. A purchase requisition is essentially an internal…show more content…
The system can then access the online purchase order and receiving files and check the match of items, quantities, and prices. 28. A user who logs in to the computer-based accounting system to enter invoices should also have access to the portion of the system that would allow her / him to order goods. 29. Computer logs should be maintained in order to have a complete record of who used the system and the histories of that use. This computer log would allow monitoring and identification of unauthorized accesses or uses. 30. When a company implements an evaluated receipt settlement results in the increase in the strength of the internal controls. 31. Because the evaluated receipts settlement process relies heavily on an IT system that can quickly access online purchase-order files, a system slowdown could halt all receiving activity. 32. E-business and EDI have much different advantages and risks to the vendor than what exists for the customer. 33. Redundancy is needed for servers, data, and networks. 34. It is likely that expenditure fraud and ethics violations could be eliminated by a strong, ethical “tone at the top” along with encouragement of ethical behavior by all employees, and strong internal controls. 35. Corporate governance policies and procedures must be in place to assure that funds are expended only to the benefit the organization and its owners. 36. It is necessary that
Open Document