Exam 8: Acquisition and Expenditure Cycle

If internal controls over the expenditure cycle are weak,auditors will need to design substantive procedures to try to detect whether control failures have produced misleading financial statement account balances.

Which of the following situations represents an internal control weakness in the payroll department?

Bill of ladings for goods shipped from a vendor to the purchasing company should always include the company's purchase order number.

To test the transaction assertion of occurrence in the area of payroll,the auditor most likely would

The test of controls for payroll includes the following audit procedures.Next to each of the procedures,indicate the related management assertion about transactions.

Vendor invoices should be compared to _______________________________ and ________________________________ to determine that the vendor is charging the approved price and for quantity received. Reference: Question also found in study guide

Which of the following would be an indicator of potential fraud?

A voucher package is used to

To determine whether accounts payable are complete,auditors perform a test to verify that all merchandise received has been recorded.The population for this test consists of all

Matthew Corp.has changed from a system of recording time worked on clock cards to a computerized payroll system in which employees record time in and out with magnetic cards.The computerized system automatically updates all payroll records.Because of this change,

Auditors ordinarily ascertain whether payroll checks are properly endorsed during the audit of

Auditors may conclude that depreciation charges are too small by noting

Paychecks should be written to a payroll bank account that is used only for payroll.

The principal goal of the physical inspection of property,plant,and equipment is to determine actual valuation of property.

Improperly capitalizing an expense item results in.

A list of all purchases might exist only in a ____________________________________ file rather than a _____________________________________. Reference: Question also found in study guide

The receiving department receives a "blind" copy of the purchase order which does not include the vendor's name and address.

An internal control questionnaire for payroll processing occurrence assertion would not include which of the following questions?

The ________________________________________ is a set of procedures designed to yield audit evidence of liabilities that were not recorded in the reporting period. Reference: Question also found in study guide AICPA BB: Critical Thinking AICPA FN: Risk Analysis Blooms: Apply

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