Applying IDEA to the Purchasing Cycle—Elm Manufacturing CompanyExercises 8.60, 8.61, and 8.62 require the application of IDEA in the purchasing cycle audit. Elm Manufacturing Company (ELM) is a small manufacturer of backpacks located in Rochelle, Illinois. You have access to ELM’s electronic records in Connect. The appropriate files for these exercises are the Purchases 2017–4th Q dataset, as well as the Cash Disbursements 2017–4th Q dataset. You will also require the Approved Vendors dataset to complete these assignments. Detailed information about ELM, instructions for accessing datasets, and a data directory for data sets can be found in Connect.8.60 Summarizing Purchasing Data with IDEA. You have been assigned the task of understanding the client’s purchasing habits, including their use of authorized vendors and payment time frames, and you must use IDEA to gather this information.

Required:

a. Determine the total dollar amount ordered from each vendor. What companies are the three largest vendors by dollar amount? How would this information assist an auditor in planning the audit?

b. Determine what products are ordered most often. What item is ordered most often? How might this information affect the audit?