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

An acquisitions transaction file is a computer generated file that includes all information entered into the system regarding acquisition transactions.

Cutoff information for inventory acquisitions should be obtained during:

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

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

A key internal control over the acquisition cycle is to ensure that the company requires recording transactions as soon as possible after the goods and services have been received.This satisfies the transaction-related audit objective of:

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

An auditor is gathering evidence on the completeness assertion.To do so she performs a test to verify that all goods received by the company have been recorded properly.The document population for this test would consist of all:

A document used by organizations to establish a formal means of recording and controlling acquisitions which usually contains a package of documents about the acquisition is the:

Because of the importance of tests of controls and substantive tests of transactions for acquisitions and cash disbursements,attributes sampling is commonly used when testing the acquisitions and cash disbursements cycle.

Receiving reports are normally only used to document the receipt of goods and are not used to document the receipt of services.

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

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

The auditor is performing substantive tests of balances for accounts payable.What documentation would provide the best evidence for the ending balance?

It is common in the acquisition and payment cycle for transactions to require significant judgment.

In searching for unrecorded liabilities the purpose of the audit procedure to "examine underlying documentation for subsequent cash disbursements" is to:

Which of the following is not a key control in the acquisition and payment cycle?