AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
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Question
Chapter 13, Problem 27DQP
a.
To determine
Identify the transaction related audit objectives being fulfilled by each of the internal controls mentioned
b.
To determine
Identify a test of control that can be performed in order to verify the effectiveness of each control
c.
To determine
Identify a substantive test for each of the controls mentioned
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The following internal controls for the acquisition and payment cycle were selected from a standard internal control questionnaire.1. Approved purchase orders are required for all acquisitions of goods.2. Prenumbered receiving reports are prepared as support for acquisitions and numeri-cally accounted for.3. Dates on receiving reports are compared with vendors’ invoices before entry into theacquisitions journal.4. Account classifications are reviewed by someone other than the preparer.5. All supporting documents are cancelled after checks are signed or electronic fundstransfers are approved.6. The authorized signer compares data on supporting documents with checks and elec-tronic funds transfer authorizations.7. Vendors’ invoices are recalculated before payment.8. All checks are signed by the owner or manager.9. Checks are mailed by the owner or manager or a person under her supervision aftersigning.
.10. The accounts payable master file is updated, balanced, and reconciled to the…
The following internal controls for the acquisition and payment cycle were selected from a standard internal control questionnaire.1. Approved purchase orders are required for all acquisitions of goods.2. Prenumbered receiving reports are prepared as support for acquisitions and numeri-cally accounted for.3. Dates on receiving reports are compared with vendors’ invoices before entry into theacquisitions journal.4. Account classifications are reviewed by someone other than the preparer.5. All supporting documents are cancelled after checks are signed or electronic fundstransfers are approved.6. The authorized signer compares data on supporting documents with checks and elec-tronic funds transfer authorizations.7. Vendors’ invoices are recalculated before payment.8. All checks are signed by the owner or manager.9. Checks are mailed by the owner or manager or a person under her supervision aftersigning.
.10. The accounts payable master file is updated, balanced, and reconciled to the…
What are the primary stages and controls in the accounts payable transaction cycle, from receiving vendor invoices to verifying, recording, and making payments to vendors?
Chapter 13 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
Ch. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Explain how the calculation and comparison to...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - For each of the eight types of evidence discussed...
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Prob. 16RQCh. 13 - Prob. 17RQCh. 13 - Prob. 18RQCh. 13 - Prob. 19RQCh. 13 - Prob. 20RQCh. 13 - Prob. 21.1MCQCh. 13 - Prob. 21.2MCQCh. 13 - A conceptually logical approach to the auditors...Ch. 13 - Prob. 22.1MCQCh. 13 - Prob. 22.2MCQCh. 13 - Prob. 22.3MCQCh. 13 - Prob. 23.1MCQCh. 13 - b. Substantive analytical procedures are most...Ch. 13 - Prob. 23.3MCQCh. 13 - Prob. 24DQPCh. 13 - Prob. 25DQPCh. 13 - Prob. 26DQPCh. 13 - Prob. 27DQPCh. 13 - Prob. 28DQPCh. 13 - Prob. 29DQPCh. 13 - Prob. 30DQPCh. 13 - Prob. 31DQPCh. 13 - Prob. 32DQPCh. 13 - Prob. 33DQPCh. 13 - Prob. 34DQPCh. 13 - Prob. 35DQP
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- 1. The primary objective of internal controls in the expenditure cycle is to: A. Ensure the accuracy and completeness of financial transactions B. Streamline the procurement process C. Minimize the cost of purchases D. Increase the speed of payment processing 2. An example of a preventive control in the expenditure cycle is: A.Requiring management approval for large purchases B. Regular inventory counts C. Using firewalls and intrusion detection systems D. Conducting vendor audits 3. Which of the following is an example of a processing control in the expenditure cycle? A. Document sequencing B. Reconciling the bank statement C. Physical controls over inventory D. Approval of vendor invoices 4. Purchase orders are used to initiate a payment in the disbursement cycle.True False 5. An automated approval workflow for payment processing eliminates the need for managerial oversight and authorization. True or Falsearrow_forward1. Which of the following is an example of an input control in the expenditure cycle? a. Physical controls over inventory b. Reconciling the bank statement c. Document sequencing d. Access controls over the purchasing system 2. A control procedure that helps prevent duplicate payments is: a. Performing physical inventory counts b. Matching purchase orders, receiving reports, and vendor invoices c. Reconciling bank statements d. Conducting vendor audits 3.Which of the following is an example of an independent verification control in the expenditure cycle? a. Document sequencing b. Reconciling the bank statement c. Segregation of duties d. Physical controls over inventoryarrow_forwardWhich control activity is the entity implementing when all purchase orders above S5,000 should be authorized by a responsible senior ? Select one a. Adequate documents and records b. Independent checks on performance c. Proper authorization of transactions and activities d. Physical control over assets and recordsarrow_forward
- The following are key controls over the purchasing and disbursement cycle except: A. Proper authorization of purchases B.Timely recording of transactions including independent review C. Proper authorization of disbursement D. Segregation of duties between the credit department and custodyarrow_forwardwhich of the following account will be least likely involved in the purhasing sub-process of the purchasing and disbursement cycle? a. proper authorization of purchases b. timely recording of transactions including independent review c. proper authorization of disbursements d. segragration of duties between the credit department and custodyarrow_forwardSubject: Accounting Information SystemQuestion: What would be the correct system flowchart for this given process: Accounts Payable and Cash Disbursement Process:Vendors send invoices to the AP department where they are reviewed and approved for payment. Once approved, the invoice and a cash disbursement voucher are sent to the cash disbursement department, where a check is prepared and sent to the vendor. A copy of the check, the invoice, and the voucher are returned to the AP department and filed.arrow_forward
- Each of the below describes a procedure consistent with a strong system of internal control except… Question 7 options: The customer order department determines when a sale has occurred and should be recorded. The accounts payable department agrees purchase requisitions, purchase orders, receiving reports, and invoices prior to payment. Quantities ordered are excluded from the receiving department copy of a purchase order so receiving personnel count and inspect merchandise received. The use of remittance advices for customers' payments on accounts receivable received in the mail.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_forwardWhich of the following will be the most appropriate test to determine wherether purchase orders are being processed on a timely basis? a. Determine the dates of unpaid accounts payable invoices. b.Compare dates of selected purchase orders with those of purchase requisitions c.select a block of used purchase order numbers and account for all number in the block d. discuss proccessing procedures with operating personnel and observe actual processing of purchases.arrow_forward
- Which of the following are principles of internal control? (Check all that apply.) Multiple select question. Increase revenues. Establish responsibilities. Maintain adequate records. Reduce vendor payables. Perform regular and independent reviews. Divide responsibility for related transactions.arrow_forwardWhich of the following tests is directed towards the management assertion of completeness of sales? Question 19 options: 1) Checking mathematical accuracy of invoices. 2) Vouching sales recorded to invoices held. 3) Tracing delivery documents to invoices and sales recorded. 4) Vouching invoices to delivery documents. Next Pagearrow_forwardConsider the following internal controls associated with an evaluated receipts process. For each control, identify the assertion for which the control is designed to prevent, or detect and correct misstatements. a. b. C. d. e. f. g. h. Software generates a daily report comparing the daily total in the cash disbursements journal with the total of payables submitted to the third-party payment processor for payment, and discrepancies are reported. Software generates a daily report of any discrepancies between the vendor accounting coding and general ledger accounts coding, which is compared with the purchase order and purchase requisition. Software generates a daily report of any discrepancies between the recorded payable and quantities on the receiving report. Once a receiving report is matched with a purchase, it cannot be matched with another purchase. Software generates a daily report of receiving reports that have not been matched one-for-one with the recording of a purchase and a…arrow_forward
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