Homework Answers
| 1 | b | Examine approved purchase orders for sample of acquisitions | |
| 2 | a | Account for a normal sequence of receiving reports | |
| 3 | f | Examine vendors invoices for indication of comparison | |
| 4 | g | Examine vendors invoices for indication of internal verification | |
| 5 | h | Examine vendors invoices for indication of reclaculation | |
| 6 | c | examine cancelled checks for signature | |
| 7 | f | examine vendors invoices for indication of comparison | |
| 8 | i | observe check mailing procedures and inquire about the normal procedures | |
| 9 | e | examine supporting documents for indication of cancellation | |
| 10 | d | examine the indication of reconciliation of master file and control account | |
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Requirement c. For each control, identify an audit procedure that could be used to test the...
Requirement e. For each likely misstatement, identify a substantive audit procedure to determine whether the misstatement...
Requirement e. For each likely misstatement, identify a substantive audit procedure to determine whether the misstatement exists. (Substantive audit procedures may be used more than once.) ) (Click the icon to view the substantive audit procedures.) Substantive Audit Substantive Audit Procedures Internal Controls Procedure 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Dates on receiving reports are compared with vendors' invoices before entry...
Requirement b. For each control, state which transaction-related audit objective(s) is (are) applicable. Transaction-related Audit Internal...
Requirement b. For each control, state which transaction-related audit objective(s) is (are) applicable. Transaction-related Audit Internal Controls Objective(s) 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Accuracy Dates on receiving reports are compared with vendors' invoices before entry into the 3. acquisitions journal. Classification Completeness 4. Account classifications are reviewed by someone other than the preparer. Occurrence 5. Vendors' invoices are recalculated before...
Requirement a. For each control, identify which element of the five categories of control activities is...
Requirement a. For each control, identify which element of the five categories of control activities is applicable (separation of duties, proper authorization, adequate documents or records, physical control over assets and records, or independent checks on performance). Internal Controls Control Activity 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Dates on receiving reports are compared with vendors' invoices before entry 3. into the...
Requirement d. For each control, identify a likely misstatement, assuming that the control does not exist or is not fun...
Requirement d. For each control, identify a likely misstatement, assuming that the control does not exist or is not functioning. (Possible misstatements may be used more than once.) (Click the icon to view the possible misstatements.) Possible Misstatements Possible Misstatement Internal Controls j. A misstatement in calculation of a vendor's invoice. 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Dates on receiving reports...
Requirement a. Indicate whether each procedure is a test of control, substantive test of transactions, substantive...
Requirement a. Indicate whether each procedure is a test of control, substantive test of transactions, substantive analytical procedure, or a test of details of balances. Type of Test Procedure Discuss the duties of the cash disbursements clerk with him and observe whether 1. he has responsibility for handling cash or preparing the bank reconciliation. Examine the internal auditor's initials on monthly bank reconciliations as an 2. indication of whether they have been reviewed. Account for a sequence of checks in...
Requirement b. Identify the type of evidence for each procedure. Procedure Type of Evidence Discuss the...
Requirement b. Identify the type of evidence for each procedure. Procedure Type of Evidence Discuss the duties of the cash disbursements clerk with him and observe whether he has responsibility for handling cash or preparing the bank 1. reconciliation. Examine the internal auditor's initials on monthly bank reconciliations as 2. an indication of whether they have been reviewed. Account for a sequence of checks in the cash disbursements journal to 3. determine whether any have been omitted. Examine vendors' invoices...
(Click the icon to view the intemal controls.) i Click the icon to view the test...
(Click the icon to view the intemal controls.) i Click the icon to view the test of controls.) Begin by selecting one internal control for each of the six transaction-related audit objectives for cash disbursements. Then, for ea Internal Test of Transaction-Related Audit Objectives Control Controls 1. Recorded cash disbursements are for goods and services actually received (occurrence) 2. Existing cash disbursement transactions are recorded (completeness). 3. Recorded cash disbursement transactions are accurate (accuracy) 4. Cash disbursement transactions are correctly...
Requirement e. For each control, identify one audit test that the auditor could use to uncover...
Requirement e. For each control, identify one audit test that the auditor could use to uncover misstatements resulting from the absence of the control. (Letters may be used more than once.) (Click the icon to view the audit tests.) Audit test to uncover misstatements Internal control Human resource policies require an investigation of an employment application from new employees. Investigation includes checking the employee's background, former employers, and 1. references. 2. Approval of department head or foreman on time records...
a. Identify whether each of 1 through 7 is a control test deviation, a monetary misstatement,...
a. Identify whether each of 1 through 7 is a control test deviation, a monetary misstatement, or both. b. For each exception, identify which transaction-related audit objective was not met. c. What is the audit importance of each of these exceptions? d. What follow-up procedures would you use to determine more about the nature of each exception? e. How would each of these exceptions affect the rest of your audit? Be specific. f. Identify internal controls that should have prevented...
7-30 (OBJECTIVE 7-4) The following are various audit procedures performed to satisfy specific transaction-related audit objectives...
7-30 (OBJECTIVE 7-4) The following are various audit procedures performed to satisfy specific transaction-related audit objectives as discussed in Chapter 6. The general transaction-related audit objectives from Chapter 6 are also included. Audit Procedures 1. Trace from receiving reports to vendors' invoices and entries in the acquisitions journal. 2. Add the sales journal for the month of July and trace amounts to the general ledger. 3. Examine expense voucher packages and related vendors' invoices for approval of expense account classification....
Requirement e. For each likely misstatement, identify a substantive audit procedure to determine whether the misstatement exists. (Substantive audit procedures may be used more than once.) ) (Click the icon to view the substantive audit procedures.) Substantive Audit Substantive Audit Procedures Internal Controls Procedure 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Dates on receiving reports are compared with vendors' invoices before entry...
Requirement b. For each control, state which transaction-related audit objective(s) is (are) applicable. Transaction-related Audit Internal Controls Objective(s) 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Accuracy Dates on receiving reports are compared with vendors' invoices before entry into the 3. acquisitions journal. Classification Completeness 4. Account classifications are reviewed by someone other than the preparer. Occurrence 5. Vendors' invoices are recalculated before...
Requirement a. For each control, identify which element of the five categories of control activities is applicable (separation of duties, proper authorization, adequate documents or records, physical control over assets and records, or independent checks on performance). Internal Controls Control Activity 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Dates on receiving reports are compared with vendors' invoices before entry 3. into the...
Requirement d. For each control, identify a likely misstatement, assuming that the control does not exist or is not functioning. (Possible misstatements may be used more than once.) (Click the icon to view the possible misstatements.) Possible Misstatements Possible Misstatement Internal Controls j. A misstatement in calculation of a vendor's invoice. 1. Approved purchase orders are required for all acquisitions of goods. Prenumbered receiving reports are prepared as support for acquisitions and 2. numerically accounted for. Dates on receiving reports...
Requirement a. Indicate whether each procedure is a test of control, substantive test of transactions, substantive analytical procedure, or a test of details of balances. Type of Test Procedure Discuss the duties of the cash disbursements clerk with him and observe whether 1. he has responsibility for handling cash or preparing the bank reconciliation. Examine the internal auditor's initials on monthly bank reconciliations as an 2. indication of whether they have been reviewed. Account for a sequence of checks in...
Requirement b. Identify the type of evidence for each procedure. Procedure Type of Evidence Discuss the duties of the cash disbursements clerk with him and observe whether he has responsibility for handling cash or preparing the bank 1. reconciliation. Examine the internal auditor's initials on monthly bank reconciliations as 2. an indication of whether they have been reviewed. Account for a sequence of checks in the cash disbursements journal to 3. determine whether any have been omitted. Examine vendors' invoices...
(Click the icon to view the intemal controls.) i Click the icon to view the test of controls.) Begin by selecting one internal control for each of the six transaction-related audit objectives for cash disbursements. Then, for ea Internal Test of Transaction-Related Audit Objectives Control Controls 1. Recorded cash disbursements are for goods and services actually received (occurrence) 2. Existing cash disbursement transactions are recorded (completeness). 3. Recorded cash disbursement transactions are accurate (accuracy) 4. Cash disbursement transactions are correctly...
Requirement e. For each control, identify one audit test that the auditor could use to uncover misstatements resulting from the absence of the control. (Letters may be used more than once.) (Click the icon to view the audit tests.) Audit test to uncover misstatements Internal control Human resource policies require an investigation of an employment application from new employees. Investigation includes checking the employee's background, former employers, and 1. references. 2. Approval of department head or foreman on time records...
7-30 (OBJECTIVE 7-4) The following are various audit procedures performed to satisfy specific transaction-related audit objectives as discussed in Chapter 6. The general transaction-related audit objectives from Chapter 6 are also included. Audit Procedures 1. Trace from receiving reports to vendors' invoices and entries in the acquisitions journal. 2. Add the sales journal for the month of July and trace amounts to the general ledger. 3. Examine expense voucher packages and related vendors' invoices for approval of expense account classification....
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