cpa audit review ch 7 review 5

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Joens1313
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281514
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cpa audit review ch 7 review 5
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2014-08-28 00:33:03
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cpa audit review
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cpa audit review ch 7 review 5
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  1. An internal control questionnaire indicates that an approved receiving report is required to accompany every check request for payment of merchandise. Which of the following procedures provides the greatest assurance that this control is operating effectively? Select and examine

    A.Canceled checks and ascertain that the related receiving reports are dated no later than the checks.

    B.Receiving reports and ascertain that the related canceled checks are dated no earlier than the receiving reports.

    C.Receiving reports and ascertain that the related canceled checks are dated no later than the receiving reports.

    D.Canceled checks and ascertain that the related receiving reports are dated no earlier than the checks.
    A.Canceled checks and ascertain that the related receiving reports are dated no later than the checks.

    The best procedure is to test whether any checks have been issued without receiving reports. An appropriate sample of canceled checks and the related supporting documentation should be examined. The checks should not have been written before the dates on the receiving reports.
  2. For effective internal control purposes, the vouchers payable department ordinarily should
    Establish the agreement of the vendor’s invoice with the receiving report and purchase order.

    A voucher should not be prepared for payment until the vendor’s invoice has been matched against the corresponding purchase order and receiving report. This procedure provides assurance that a valid transaction has occurred and that the parties have agreed on the terms, such as price and quantity.
  3. Your objective is to determine that nonrecurring purchases, initiated by various user organizations, have been properly authorized. If all purchases are made through the purchasing department, to  documents should you vouch purchases?
    Purchase requisitions.

    When the auditor tests for unauthorized nonrecurring purchases, (s)he should vouch purchases to the purchase requisitions. The initiating authorization by the user department is embodied in a properly authorized purchase requisition.

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