Exam 11: Auditing the Purchasing Process

If payables turnover has increased significantly since the prior year, this is an indication that which of the following assertions for accounts payable might be violated?

Which of the following questions would most likely be included in an internal control questionnaire concerning the completeness assertion for purchases?

An auditor compares information on canceled checks with information contained in the cash disbursements journal. The objective of this test is to determine that:

Match the test of controls described below to the appropriate assertion it is used to test. -Test a sample of vouchers for the presence of authorized purchase order and receiving report

Budd, the purchasing agent for Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a C.O.D. basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control over:

The cutoff assertion for accounts payable includes:

As an in-charge auditor, you are reviewing a summary of control weaknesses in cash disbursement procedures. Which one of the following weaknesses, standing alone, should cause you the least concern?

Identify the primary functions in the purchases cycle and describe each function. Functions in the purchasing process include:

Substantive procedures to examine the occurrence assertion for accounts payable include:

Tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of:

Match the test of controls described below to the appropriate assertion it is used to test. -Compare the dates on the receiving reports with the dates of the relevant vouchers

The audit procedures used to verify accrued liabilities differ from those employed for the verification of accounts payable because:

When an auditor selects a sample of items from the vouchers payable register for the last month of the period under audit and traces these items to underlying documents, the auditor is gathering evidence primarily in support of the assertion that:

Which of the following audit procedures is least likely to detect an unrecorded liability?

To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of all:

Which of the following accounts is not affected by cash disbursement transactions?

Listed below are the major functions of the purchasing process. 1)Purchasing function. 2)General ledger function. 3)Invoice-processing function. 4)Disbursement function. 5)Accounts payable function. 6)Requisition and receiving function.

Substantive procedures to examine the completeness assertion for accounts payable include:

Which of the following is a substantive procedure that an auditor most likely would perform to verify the existence of recorded accounts payable?

An auditor performs a test to determine whether all merchandise was received for which the entity was billed. The population for this test consists of all: