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

By tracing receiving reports issued at and before year-end to vendors' invoices and making sure they are included in accounts payable, the auditor is testing for

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

Typically, a company can determine whether inventory has been acquired FOB destination or origin by examining the vendor's invoice.

The "rights "aspect of the "rights and obligations" objective is not applicable to liabilities.

Matching the supplier's invoice, the purchase order, and the receiving report prior to preparing the voucher would normally be the responsibility of the

The controls over acquisitions included in the perpetual inventory records are normally tested as a part of the test of controls and substantive tests of transactions for the sales and collection cycle.

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

The internal control that requires that "checks are prenumbered and accounted for" satisfies the objective of

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 accounts is not part of the acquisition and payment cycle?

The auditors' ultimate substantive tests depend on the relative effectiveness of internal controls related to accounts payable.

Knowledge of the client's business is essential for tests related to reviewing the accounts payable listing and master file for related parties and debit balances.

Significant audit efficiencies can be achieved on many audits when controls are operating effectively.

If the client counts inventory at year end, it is essential that cutoff tests be coordinated with the physical observation of inventory.

In an audit with a December 31 year-end, the audit needs to only examine supporting documentation for disbursements paid through January 31 of the following month.

When determining the methodology for designing tests of details of balances for accounts payable,

The overall objective in the audit of accounts payable is to determine whether accounts payable

Absent disputed amounts and minor timing differences, the vendor's statements should reconcile to the

Which of the following is most reliable for verifying the correct balance of accounts payable?

Under which of the following circumstances would it be advisable for the auditor to confirm accounts payable with creditors?