Exam 18: Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

The auditor gets highly reliable evidence about individual transactions by examining:

When the client's physical inventory occurs before the last day of the year, it is still necessary to perform an accounts payable cutoff at the time of the count.In addition, the auditor must verify whether all acquisitions taking place between the count and the end of the year were added to:

You are performing the audit of Jenkins and Company.Your tests of controls and tests of transactions for accounts payable demonstrate that the controls are operating effectively.This would normally allow you to:

When auditors examine vendors' statements or receive confirmations, there must be a reconciliation of the statement or confirmation with the:

When a client uses perpetual inventory records, the tests of details of balances for inventory can be significantly reduced if the auditor believes the records are accurate.The controls over the acquisitions included in the records are normally tested as a part of the:

The main focus taken by the auditor in verifying liability balances is on the discovery of: I.understated liabilities. II) omitted liabilities.

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

When auditing accounts payable, the auditor is more concerned about the possibility of understatements than overstatements.

Auditor confirmation of accounts payable balances at the balance sheet date may not need to be performed by the auditor because:

Which of the following documents is best for verifying the correct balance in accounts payable?

Which of the following accounts is not part of the acquisition and payment cycle?

A written purchase order is a contractual document that is:

To test for overstatement cutoff amounts when auditing accounts payable, the auditor should trace receiving reports issued before year-end to related vendors' invoices to make sure they are not recorded as accounts payable.

The balance-related audit objective realizable value is not applicable when auditing accounts payable.

The acquisition and payment cycle consists of one class of transactions.

A vendor invoice is normally prepared at the time tangible goods are received and indicates the description of goods, the quantity received, the date received, and other relevant data.

The documents typically used to reconcile the balance on the accounts payable list with the confirmation or vendor's statements include all of the following except for:

The acquisition and payment cycle typically begins with the initiation of purchase requisition for goods and services from an authorized individual.

Which of the following is not an accurate statement regarding the acquisition and payment cycle?

Failure to record the acquisition of goods is a violation of which audit objective?