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4 (10 Marks) You are asked to audit Sun Group Ltd's control activities related to cash payment. You noticed the following control procedures for cash
4 (10 Marks) You are asked to audit Sun Group Ltd's control activities related to cash payment. You noticed the following control procedures for cash payment: 1. When making cash payments to suppliers, the assistant accountant is required to check whether there is a matching purchase order, and whether the ordered goods are received. 2. The assistant accountant is required to submit the purchase order, invoice, and the goods receipt record to the supervisor for approval. (i) For the two controls identified above, describe the purpose of the control-what is the control designed to prevent or detect? (3 marks) Internal Control 1. When making cash payments to suppliers, the assistant accountant is required to check whether there is a matching purchase order, and whether the ordered goods are received 2. The assistant accountant is required to submit the purchase order, invoice, and the goods receipt record to the supervisor for approval. Purpose (what is the control designed to prevent or detect) (ii) Identify the account(s) and assertion(s) that this control will have an effect on in the financial report. Internal Control 1. When making cash payments to suppliers, the assistant accountant is required to check whether there is a matching purchase order, and whether the ordered goods are received (4 marks) Account(s) and Assertion(s) Influenced MAA 303 Audit and Assurance Trimester 3, 2021 Examination 2. The assistant accountant is required to submit the purchase order, invoice, and the goods receipt record to the supervisor for approval. (iii) Provide one example of a procedure that could be used to test the control. (3 marks) Internal Control 1. When making cash payments to suppliers, the assistant accountant is required to check whether there is a matching purchase order, and whether the ordered goods are received 2. The assistant accountant is required to submit the purchase order, invoice, and the goods receipt record to the supervisor for approval. Procedure to test internal control
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