Exam 13: Audit of the Acquisition and Payment Cycle

The point at which most companies first recognize the acquisition and related liability on their records is when the

State six specific balance-related audit objectives for accounts payable and for each objective describe one common test of details of balances.

Internal controls that are likely to prevent the client from including as a business expense those transactions that primarily benefit management or other employees rather than the entity being audited satisfy the control objective that

The internal control that requires "approval of acquisitions at the proper level" satisfies the objective of

State each of the six specific balance-related audit objectives for manufacturing equipment additions and describe one common test of details of balances for each objective.

Discuss the audit tests the auditor would use to audit capital assets acquired in prior years.

The proper recognition of accounts payable liabilities are crucial to ensure fair statement of the ending accounts payable balance.What documents are required to adequately support accounts payable?

The test of details of balances procedure to "inspect the accounts payable trial balance and master file for related parties,notes,or other interest-bearing liabilities" satisfies the objective of

What are the factors that increase inherent risks for the accounts within the acquisition and payment cycle?

The internal control that requires "new vendors and changes to vendor file be approved" satisfies the objective of

In determining that the accounts payable cutoff is correct,it is essential that the cutoff tests be coordinated with the

A set of records for each piece of equipment that includes descriptive information,date of acquisition,original cost,current year amortization,and accumulated amortization is the

State each of the five specific transaction-related audit objectives for acquisitions and,for each objective,describe one common test of transactions.

The internal control objective to determine that "existing acquisition transactions are recorded" describes the objective of

A document identifying the description,vendor,quantity,and related information for goods and services the company intends to purchase is the

The main focus taken by the auditor in verifying liability balances is on the discovery of

Because of the importance of tests of controls for acquisitions and cash disbursements,it is common in this audit area to use

The statement that all purchase orders must be supported by properly approved purchase requisitions is a specific example of which general objective?

It is normal for the auditor to verify large and unusual transactions for the entire year as well as a representative sample of typical additions.The size of the sample for substantive testing depends on the auditor's

Describe the audit procedures typically used to test for out-of-period liabilities (also referred to as the search for unrecorded accounts payable).