Exam 13: Audit of the Acquisition and Payment Cycle

One of the ways to prevent the use of fictitious suppliers to steal company funds is to

The control test that requires "the auditor to compare recorded transactions in the acquisitions journal with the vendor's invoice, receiving report, and other supporting documentation" satisfies the objective of

Many companies have inventory that is easy to steal and is readily marketable. Which of the following controls helps to prevent theft and misuse of inventory?

To protect against theft of physical assets (such as computer equipment), the company should

ZyCo has recently converted to a new online accounts payable system. To test that only authorized vendors have been converted to the vendor master file (occurrence), the auditor would

A normal audit procedure is to analyze the current year's repairs and maintenance accounts to provide evidence in support of the audit proposition that

Since the audit of accounts payable generally takes a considerable amount of audit time, effective and properly tested internal controls can significantly reduce audit costs by reducing

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

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

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

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.

A) Describe each of the five business functions that comprise the acquisition and payment cycle. B) Describe the key documents used in processing purchase orders for the acquisitions and payment cycle. C) Discuss the key documents and records used in recognizing the liability function in the acquisitions and payment cycle.

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

One form of accounts payable fraud occurs when the accounts payable clerk or another employee steals a cheque made payable to a legitimate vendor. The purchaser's information is then resubmitted for payment and the second cheque sent to the vendor. How could such a theft be prevented?

Which of the following areas are tested as part of the audit of the acquisition and payment cycle?

The most common fraud in the acquisitions area is for the perpetrator to

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

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

The purpose of the audit procedure to "trace receiving reports issued before year-end to related vendors' invoices" is to determine that all

The most important objectives for amortization expense are valuation and