Question 1

Identify the need for controls over hiring employees, authorising payroll changes and preparing attendance and timekeeping data.

Accepted Answer

Hiring employees: controls are needed to

Question 2

Purchases transactions relate

Accepted Answer

A)  solely to the purchase of inventory held for sale. 
B)  to the purchase of inventory, plant & equipment and supplies. 
C)  to the purchase of all goods and services. 
D)  to the purchase of all goods and services and the payroll function. 
A)  solely to the purchase of inventory held for sale. 
B)  to the purchase of inventory, plant & equipment and supplies. 
C)  to the purchase of all goods and services. 
D)  to the purchase of all goods and services and the payroll function.

Question 3

Test data may be used to test application controls over accepting and recording data for unpaid suppliers' invoices. Which of the following conditions would not be relevant?

Accepted Answer

A)  numeric characters in an alphanumeric field 
B)  missing or invalid supplier numbers 
C)  missing due date or payment terms 
D)  alphabetical characters in a numeric field 
A)  numeric characters in an alphanumeric field 
B)  missing or invalid supplier numbers 
C)  missing due date or payment terms 
D)  alphabetical characters in a numeric field

Question 4

Each major class of creditors and borrowings must be disclosed in the balance sheet. Which of these would not be shown as a class of creditors and borrowings?

Accepted Answer

A)  taxation liabilities 
B)  revenue owing 
C)  employee benefits 
D)  lease liabilities 
A)  taxation liabilities 
B)  revenue owing 
C)  employee benefits 
D)  lease liabilities

Question 5

What could motivate management to misstate expenditures? What other factors may lead to misstatements?

Accepted Answer

-They may understate expenses in order t

Question 6

Describe the audit process for payroll transactions. Indicate the audit risks that need to be addressed and the mitigating controls that can be implemented.

Accepted Answer

The audit process for payroll transactio

Question 7

With regards to control risk assessment for purchase transactions, align the potential misstatements in the following chart with their possible tests of operating effectiveness.

Accepted Answer

The answer of With regards to control risk assessment for...

Question 8

Following is a description of Out of Control corporations' inventory purchases process for skateboard wheels. Identify the weaknesses in the controls and suggest possible improvements.
When stock falls below 100 the computer automatically produces a purchase requisition for more stock from the supplier. If there is a special promotion coming up, Anthony, the marketing manager, might put in an extra purchase requisition for promotional stock. The computer numbers the dockets in sequence and sends them to the purchasing department.
The purchasing department issues a purchase order with their standard supplier when they receive an authorised purchase requisition. Anthony used to work in purchasing, and is good friends with Chris who now manages the purchasing department. Anthony sometimes covers a shift for Chris when he has a day off.
When the order arrives at the warehouse receiving dock, the purchase order is compared to the goods received: The personnel check that the right types of wheels are included, the right number of wheels is included, and that they are undamaged. They then prepare a prenumbered receiving report and forward it to accounting along with the suppliers invoice.
Accounting then enters the amounts from the supplier invoices into the system.

Accepted Answer

Purchase requisitions: The authority to

Question 9

For proper control, unclaimed payroll cheques should be stored by the

Accepted Answer

A)  finance department. 
B)  payroll department. 
C)  personnel department. 
D)  timekeeping department. 
A)  finance department. 
B)  payroll department. 
C)  personnel department. 
D)  timekeeping department.

Identify the need for controls over hiring employees, authorising payroll changes and preparing attendance and timekeeping data.

Purchases transactions relate

Test data may be used to test application controls over accepting and recording data for unpaid suppliers' invoices. Which of the following conditions would not be relevant?

Each major class of creditors and borrowings must be disclosed in the balance sheet. Which of these would not be shown as a class of creditors and borrowings?

What could motivate management to misstate expenditures? What other factors may lead to misstatements?

Describe the audit process for payroll transactions. Indicate the audit risks that need to be addressed and the mitigating controls that can be implemented.

With regards to control risk assessment for purchase transactions, align the potential misstatements in the following chart with their possible tests of operating effectiveness.

For proper control, unclaimed payroll cheques should be stored by the

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedures

Auditing Sales and Receivables

Auditing Inventories and PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters

Exam 10: Auditing Purchases, Payables and Payroll

Identify the need for controls over hiring employees, authorising payroll changes and preparing attendance and timekeeping data.

Purchases transactions relate

Test data may be used to test application controls over accepting and recording data for unpaid suppliers' invoices. Which of the following conditions would not be relevant?

Each major class of creditors and borrowings must be disclosed in the balance sheet. Which of these would not be shown as a class of creditors and borrowings?

What could motivate management to misstate expenditures? What other factors may lead to misstatements?

Describe the audit process for payroll transactions. Indicate the audit risks that need to be addressed and the mitigating controls that can be implemented.

With regards to control risk assessment for purchase transactions, align the potential misstatements in the following chart with their possible tests of operating effectiveness.

For proper control, unclaimed payroll cheques should be stored by the

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedures

Auditing Sales and Receivables

Auditing Inventories and PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters