Concept explainers
a)
To determine: The argument for and against the process of sending a copy of the PO from the purchasing department to the receiving department.
Introduction:
b)
To determine: The argument for and against the process of having the quantity ordered field “blinded” on the receiving department copy of the PO.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
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Chapter 12 Solutions
Accounting Information Systems
- When using test data, why are audit teams required to prepare only one transaction to test each IT control?a. The speed and efficiency of the computer results in reduced sample sizes.b. The risk of misstatement is typically lower in an IT environment.c. Audit teams generally perform more extensive substantive testing in an IT environment, resulting in less need to test processing controls.d. In an IT environment, each transaction is handled in an identical manner.arrow_forwardUsing the flowchart of a purchases system, identify six major control weaknesses in the system. Discuss and classify each weakness in accordance with SAS 78/COSO.arrow_forwardWhich of the following best represents a key control for ensuring sales are properlyauthorized when assessing control risks for sales? A. The separation of duties between the billing department and the cash receipts approval department. B. The use of an approved price list to determine unit selling price. C. Copies of approved sales orders sent to shipping, billing, and accounting departments. D. Sales orders are sent to the credit department for approval.arrow_forward
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