Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for the existence assertion related to the equipment account?(1) As purchases of equipment are recorded in the purchases journal, the systemautomatically posts the item to the equipment master file.(2) Internal auditors physically examine equipment on a periodic basis and verifythat the equipment is included in the equipment master file.(3) All additions to the equipment account must be supported by a valid receivingreport.(4) Assignment of general ledger account coding is reviewed by the accounts payablesupervisor as purchases are recorded in the purchases journal.
Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for the existence assertion related to the equipment account?(1) As purchases of equipment are recorded in the purchases journal, the systemautomatically posts the item to the equipment master file.(2) Internal auditors physically examine equipment on a periodic basis and verifythat the equipment is included in the equipment master file.(3) All additions to the equipment account must be supported by a valid receivingreport.(4) Assignment of general ledger account coding is reviewed by the accounts payablesupervisor as purchases are recorded in the purchases journal.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity
Section: Chapter Questions
Problem 23CYBK
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Question
Which of the following controls will most likely justify a reduced assessed level of
control risk for the existence assertion related to the equipment account?
(1) As purchases of equipment are recorded in the purchases journal, the system
automatically posts the item to the equipment master file.
(2) Internal auditors physically examine equipment on a periodic basis and verify
that the equipment is included in the equipment master file.
(3) All additions to the equipment account must be supported by a valid receiving
report.
(4) Assignment of general ledger account coding is reviewed by the accounts payable
supervisor as purchases are recorded in the purchases journal.
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