Exam 11: Auditing the Purchasing Process

The accounts payable department receives the purchase order form to accomplish all of the following except to:

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

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

Tests of controls for the occurrence assertion for purchases include all of the following except:

Substantive procedures to examine the cutoff assertion for accounts payable include

For effective internal control,the accounts payable department should compare the information on each vendor's invoice with the

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

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

A product cost is

Listed below are six assertions regarding the financial presentations made in the purchasing process.For each,give an example of how an auditor could use one of the typical documents in the purchasing process to test the assertion. Occurrence Completeness Authorization Accuracy Cutoff Classification

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

A client's procurement system ends with the assumption of a liability and the eventual payment of the liability.Which of the following best describes the auditor's primary concern with respect to liabilities resulting from the procurement system?

An examination of the balance in the accounts payable account is ordinarily not designed to

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. Name four pairs of functions that should be segregated from each other and explain why the segregation is important.

An auditor wishes to perform tests of controls on a client's cash disbursements procedures.If the control activities leave no audit trail of documentary evidence,the auditor most likely will test the procedures by

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

If completeness is a concern for accounts payable,auditors will send accounts payable confirmations to

Identify the primary functions in the purchases cycle and describe each function.

An entity's internal control requires that for every check request there be an approved voucher,supported by a prenumbered purchase order and a prenumbered receiving report.To determine whether checks are being issued for unauthorized expenditures,an auditor most likely would select items for testing from the population of all

The first type of expense is a product cost.These costs can be directly matched to specific transactions or events and are recognized upon recognition of revenue. 2.The second type of expense is a period cost.These are expenses recognized during the period in which cash is spent or liabilities are incurred for goods and services to be used up within a short amount of time. 3.The last type of expense includes those that are allocated systematically and rationally to the period during which the related assets are expected to provide benefits.