cpa audit ch7 review 9

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  1. To provide assurance that each voucher is submitted and paid only once, an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is
    Stamped “paid” by the check signer.

    To provide assurance that voucher documentation is not used to support a duplicate payment, the individual responsible for cash disbursements should examine the voucher and determine the appropriateness of the supporting documents, sign the check, cancel the payment documents, and mail the check to the vendor.
  2. Effective internal control activities over the payroll function may include
    Verification of agreement of job time tickets with employee time clock card hours by a timekeeping department employee.

    The total time spent on jobs should approximate the total time indicated on time clock cards. Timekeeping’s comparison of these records should provide an independent check of the accuracy of time reported on the time clock cards.
  3. A company uses an MRP (materials requirement planning) system to control inventory. One objective is to minimize raw material inventories while avoiding production shutdowns. One way to achieve this objective using MRP is to
    Regularly update the authorized master production schedule.

    MRP is a computer-based information system designed to plan and control materials used in production. It determines the quantity of finished goods that will be required and the point when they will be needed. The system requires prompt notice of changes in production schedules.
  4. Apex Manufacturing Corporation mass produces eight different products. The controller who is interested in strengthening internal control over the accounting for materials used in production is most likely to implement a(n)
    Perpetual inventory system.

    A perpetual inventory system provides for continuous updating of inventory records and thus accounts for materials used. Close and continuous attention must be paid to materials usage to keep a perpetual system up to date.
  5. What are appropriate controls over securities and investments
    Storage in a safe-deposit box.

    Proper authorization of transactions.

    Custodian bonded and separate from investment records.
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cpa audit ch7 review 9
2014-06-08 05:02:54
cpa audit ch7 review

cpa audit ch7 review 9
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