Canterlot Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Australia. During the 2020 year, Canterlot gained a new client, Cloudsdale Medical Group (CMG), which owns 100 per cent of the following entities:

• Everfree Forest Hospital, a private hospital group

• Calendula Care Pty Ltd, a private nursing home

• Tempo Cancer Treatment Limited (TCTL), a private oncology clinic that specialises in the treatment of cancer.

Year-end for all CMG entities is 30 June.

Everfree Forest Hospital is a private hospital group generating revenue from patients for stays in the hospital and medical practitioners in private practice for use of the hospital facilities and provision of nurses, anaesthetists, operating theatres and supplies.

You are working on the 2020 engagement for Everfree Forest and your assurance services manager has requested you use substantive analytical procedures to calculate Everfree Forest’s estimated revenue for patients staying in the hospital, excluding medical procedures and ancillary costs such as medication.

You are also completing the planning of the accounts payable and payments system. Accounting staff perform the following procedures.

• A pre-numbered cheque requisition is prepared for all payments.

• The details on the supplier’s invoice are matched to the appropriate receiving report.

• The details on the supplier’s invoice and receiving report are matched to an authorised purchase order.

• The cheque requisition is stapled to the authorised purchase order, receiving report and supplier’s invoice and forwarded to the appropriate senior staff member for review and authorisation.

• The authorised cheque requisition, together with the supporting documents, is passed to accounts payable for payment.

Your controls testing confirms that the activities are performed effectively.

Design the tests of details for purchases that you would use to supplement the analytical procedures. Relate each test to the relevant assertion for purchases.