AUDITING+ASSURANCE 12MONTH ACCESS CARD
AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
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Chapter 11, Problem 23DQP
To determine

Indicate which of the five COSO internal control components is best represented by each internal control.

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SYSTEM DOCUMENTATION-EXPENDITURE CYCLE (MANUAL AND COMPUTER PROCEDURES) The following describes the expenditure cycle for a hypothetical company. The company has a centralized computer system with terminals located in various departments. The terminals are networked to a computer application, and digital accounting records are hosted on a server in the data processing department. Each day, the computer in the data processing center scans the inventory records looking for items that must be replenished. For each item below its reorder point, the system creates a digital purchase order and prints two hard copies. A technician in the data center sends the purchase orders to the purchasing department clerk. Upon receipt of the purchase orders, the purchasing clerk reviews and signs them. He sends Copy 1 to the supplier and files Copy 2 in the purchasing department. A few days later, the supplier ships the order and the goods arrive at the receiving department. The receiving clerk reviews…
Following are descriptions of 10 internal controls. The company has an organizational chart that establishes the formal lines of reporting and authorization protocols. Before a cash disbursement can be processed, all payee information must be verified by matching the payee to the company’s approved vendor listing. The company’s computer systems track individual transactions and automatically accumulate transactions to create a trial balance. On a monthly basis, department heads compare a budget to actual performance report and investigate unusual differences. The company must receive university transcripts documenting all college degrees earned before an individual can begin employment with the company. Senior management obtains data about external events that might affect the entity and evaluates the impact of that information on its existing accounting processes. Each quarter, department managers are required to perform a self-assessment of the department’s compliance…
Vendor account reconciliations are performed by three clerks in the accounts payabledepartment on Friday of each week. The accounts payable supervisor reviews thecompleted reconciliations the following Monday to ensure they have been completed.The work performed by the supervisor is an example of which COSO component?(1) Control activities (3) Risk assessment(2) Information and communication (4) Monitoring
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