EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
expand_more
expand_more
format_list_bulleted
Question
Chapter 21, Problem 13.3MCQ
To determine
Identify the duty related to inventory and warehousing causes the greatest concern about inadequate segregation of duties.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which of the following statements concerning internal control procedures for merchandise sales is not correct?
a.Accounting for a sale begins with the receipt of a purchase order or some similar document from a customer.
b.Shipping and billing documents are prepared based on the order document.
c.A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present.
d.The order document is not necessary for the buyer to be obligated to accept and pay for the ordered goods.
Which of the following procedure is designed to prevent the company from ordering unnecessary items?
A. Periodic counts of inventory and reconciliaton of counts to inventory records
B. Using approved suppliers
C. Requiring purchasing agents to disclose any financial investments in potential suppliers
D. Approval of purchase requisitions
The following set of items describes activities completed by a company in purchasing and
paying for merchandise. For each activity, identify whether or not the activity adheres to or
violates sound internal control procedures.
The receiving department compares the quantity received with the quantity printed
on the receiving report when the purchase order was prepared.
O d. Cannot be determined.
O c. Neither strengthens nor violates internal control
O b. Violates sound internal control procedures
O a. Adheres to sound internal control procedures
Chapter 21 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 21 - Prob. 1RQCh. 21 - Prob. 2RQCh. 21 - Prob. 3RQCh. 21 - Prob. 4RQCh. 21 - Prob. 5RQCh. 21 - Prob. 6RQCh. 21 - Prob. 7RQCh. 21 - Prob. 8RQCh. 21 - Prob. 9RQCh. 21 - Prob. 10RQ
Ch. 21 - Prob. 11RQCh. 21 - Each employee of the Gedding Manufacturing Co., a...Ch. 21 - Prob. 13.1MCQCh. 21 - Prob. 13.2MCQCh. 21 - Prob. 13.3MCQCh. 21 - Prob. 14.1MCQCh. 21 - Prob. 14.2MCQCh. 21 - Prob. 14.3MCQCh. 21 - Prob. 15.1MCQCh. 21 - Prob. 15.2MCQCh. 21 - Prob. 15.3MCQCh. 21 - Prob. 16DQPCh. 21 - Prob. 17DQPCh. 21 - Prob. 18DQPCh. 21 - Prob. 19DQPCh. 21 - Prob. 20DQPCh. 21 - Prob. 22DQPCh. 21 - Your client, Ridgewood Heating and Cooling,...Ch. 21 - Prob. 24DQPCh. 21 - Prob. 25DQPCh. 21 - Prob. 26DQPCh. 21 - Prob. 27DQPCh. 21 - Prob. 28DQPCh. 21 - Prob. 29DQP
Knowledge Booster
Similar questions
- A serious exposure for an organization that is connnected with the revenue cycle is the loss of assets. What is the related threat and applicable contrtol procudure associated with this exposure? A. receiving unordered goods; compare to valid order B. billing errors; reconciliation of shipping documents to sales order C. shipping errors, data entry controls D. theft of inventory; documentation of all internal transfers of inventoryarrow_forwardSales orders are written by sales people who have no access to the goods, which are released by warehouse personnel. This is example of: an analytical review establishing a system for storing and counting inventory proper documentation that is monitored properly segregation of dutiesarrow_forwardAn 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.arrow_forward
- 1. Why should the function of requisitioning the purchase of goods be segregated from the function of issuing purchase orders? 2. Explain how an automated matching process works regarding the payment of accounts payable 3. What control objective is addressed by having prenumbered receiving documentsarrow_forwardWhat is the major advantage of using a perpetual inventory system? a.) It provides efficient internal control over materials. b.) It avoids inventory shortages and overages. c.) It minimizes error in posting receipts and issues of materials. d.) It avoids losses due to theft.arrow_forwardIn a good internal control system, which of the following sets of documents is required for proper approval of a payment to a supplier? A. a journal entry, a supplier invoice, and a description of the goods being purchased B. a supplier invoice, a bill of lading, and the supplier's financial statements C. a purchase order, a journal entry, and a price catalog D. a receiving report, an invoice, and a purchase orderarrow_forward
- Segregation of Functions Comment on the specific risks (if any) that are caused by the following combination of tasks. A) A sales manager, who works on commission based on gross sales, approves credit and has the authority to write off uncollectible accounts. B) The warehouse clerk, who has custodial responsibility over inventory in the warehouse, updates the inventory subsidiary ledger and prepares an inventory summary for the general ledger department. C). The billing clerk bills customers and records sales in the sales journal. D). The shop foreman approves and submits time cards to timekeeping and distributes paychecks to employees. E) The accounting clerk posts to individual accounts receivable subsidiary accounts and performs the reconciliation of the subsidiary ledger and the GL control account.arrow_forward1. 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_forwardWhy is it important for auditors to obtain control information over inventory count sheets or tickets?arrow_forward
- Describe the procedures, documents, and departments involved when insufficient inventory is available to fill a customer’s approved order.arrow_forwardA portion of a client’s inventory is in public warehouses. Evidence of the existence of this merchandise can most efficiently be acquired through which of the following methods?a. Observation.b. Confirmation.c. Calculation.d. Inspection.arrow_forwardManagement and auditor are concerned about inventory control function in automated system? Why? How to mitigate this concern?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning