1) A vendor imvoice is normally prepared at the time tangible goods are recelved and indicates the description of goods, the quantity recelved, the date recelved, and other relevant data. 1) 2) One of important internal controls over cash disbursements should include not only the physical signing of checks, but also the approval of electronic funds transfers by Individuals with proper authority. 2) 3) The balance-related audit objective realizable value is not applicablo when auditing accounts payabie. 3) 4) The "rights "aspect of the "rights and obligations" objective is not applicable to liabilities. 5) An acquisitions transaction file is a computer-generated flie that includes all information cniered 4) Into the system regarding acquisition transactions. 5) 6) When auditing accounts psyable, the auditor is more concerned about the possibility of understatements than overstatements. 6) 7) The audit procodure "Examine canceled check for authorized signature, proper andorsement, and 7) B) 9) Auditors typically set performance materiality for accounts payable relatively low. 9) cancelled check and is no longer a liability, but now is a document. 10) acquisitions than about violations of the occurrence objective for acquisitions. 11) 12) Auditors must also take into consideration the Identification of material contracts, commitmen and related party transactions which require disclosure in the financial statements and/or the and related party transactions which 12) 13) Examples of a client not using prenumbered receiving reports, a client not recording acquisitions until cash disbursements are actually mado, and because of cash shortages paying bills several months after their due date generally force the auditor to perform more extensive substantive testing of the delails of accounts payable. 14) Companies may deliberately understate acoounts payable to overstate financial performance. 15) Purchase returns and allowances and purchase discounts business functions are also part of the 15) acquisition and payment cycle. 16) Inadequate controls over purchases and accounts payable can result in opportunities to embezzle 16) from the organization. 17) It is possible to use Electronic Data Interface (EDI) to process payments to vendors electronically using Electronic Funds Transfer (EFT) between the company's bank and the vendor's bank. 17) 18) When verifying the correct balance in accounts payable, vendors' involces are more useful than 18) vendors' statements. 19) The total of the unpaid indlvidual account balances in the accounts payable master file should 19) equal the total accounts payable balance in the general ledger. 20) In an audit with a December 31 year-end, the audit needs to only examine supporting 20) documentation for disbursements paid through January 31 of the following month