1. Identify key controls that ought to be in place for the preparation and signing of cheques. (Just underline the controls)

Authorised finance department personnel, with no responsibility for initiating or processing purchase transactions, should be responsible for signing the cheques.

Authorised cheque signers need to determine that each cheque is accompanied by a properly approved supplier's invoice, and the name of the payee and amount on the cheque agree with details on the invoice.

The supplier's invoice and supporting documents should be stamped (or otherwise cancelled) with the date or the cheque number when the cheque is signed to prevent resubmission for the duplicate payment.

The cheque signer should control the mailing of the cheques to reduce the risk of theft or alterations.

No cheques should be made payable to 'cash' or 'bearer' and no blank cheques should be issued.

Cheques should be pre-numbered.

Blank cheques and signature plates should only be accessible to authorised personnel.

2. List two inherent risk factors that directly affect the purchasing process. Why should auditors be concerned about issues such as the supply of raw materials and the volatility of prices?

3. What control procedures typically ensure that the occurrence and completeness assertions are met for a purchase transaction? What tests of controls are performed for each assertion?