Exam 11: Auditing the Purchasing Process

For effective internal control over accuracy of transactions, the accounts payable department should compare the information on each vendor's invoice with the:

Operating control over the check signature plate normally should be the responsibility of the:

Which type of confirmation is used more frequently by auditors―accounts receivable confirmations or accounts payable confirmations? Why?

Which of the following procedures relating to the examination of accounts payable could the auditor delegate entirely to the entity's employees?

A product cost is:

There are several important disclosure items to consider when auditing the purchasing process. Discuss what they are and why they are important.

To provide assurance that each voucher is submitted and paid only once, an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is:

Which of the following procedures would an auditor least likely perform before the balance sheet date?

Which of the following describes a temporary difference?

A purchase transaction usually begins with the preparation of a purchase order.

Because of the low volume of purchase return transactions, the auditor normally does not test the controls associated with these transactions.

Which of the following control activities is not usually performed in the accounts payable department?

The accounts payable department is responsible for ensuring that all vendor invoices, cash disbursements, and adjustments are recorded in the accounts payable records.

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal and the cash disbursements journal. The purpose of this substantive procedure most likely was to:

The auditor can often obtain sufficient appropriate evidence in the audit of a tax provision without the use of a specialist. However, several situations may indicate a need for the auditor to involve a tax specialist. Identify three of these situations.

Which of the following describes a permanent difference?

In auditing accounts payable, an auditor's procedures most likely would focus primarily on management's assertion of:

Analytical procedures can be used to examine the reasonableness of accounts payable and accrued expenses.

Which of the following is an internal control that would prevent a paid disbursement voucher from being presented for payment a second time?

After the controls are tested, the auditor sets the achieved level of control risk.