14A1. A summary of the controls for the acquisition cycle of Keystone Computers & Networks, Inc., appears on pages 602603. a. For the following three controls over the acquisition cycle, indicate one type of error or fraud that the control serves to prevent or detect. Organize your solution as follows: Required: LO 14-1, 3, 5, 6 Appendix 14A Problems Control Error or Fraud Controlled 1. Computer matches information from vendors invoice with purchase order and receiving data. 2. The computer assigns numbers to receiving reports. 3. Checks are mailed by check signer. Control Tests of Controls 1. Computer matches information from vendors invoice with purchase order and receiving data. 2. The computer assigns numbers to receiving reports. 3. Checks are mailed by check signer. b. For each of the controls described above, indicate how the auditors could test the control. Organize your answer as follows: 14A2. As indicated on the control risk assessment working paper on page 602, the auditors identifi ed two weaknesses in internal control over the acquisition cycle of KCN. Describe the implications of each of the two weaknesses in terms of the type of errors or fraud that could result. 14A3. The auditors working paper that relates control strengths and weaknesses to the assertions about purchases and accounts payable is presented on page 602. This working paper also presents the auditors planned assessed level of control risk for each of the assertions. Prepare an audit plan for tests of the controls over the acquisition cycle. (Note: You may want to use the tests of controls plan for the revenue cycle, which is on pages 496497, as a guide.)

book reference= Principal of auditing and another assurance service

O. Ray Whittington Kurt Pany

20th edition