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Following is a selection of items from internal control questionnaires. Are purchase orders above a certain level approved by an officer? Are the quantity and
Following is a selection of items from internal control questionnaires.
- Are purchase orders above a certain level approved by an officer?
- Are the quantity and quality of goods received determined at the time of receipt by receiving personnel independent of the purchasing department?
- Are vendors' invoices matched against purchase orders and receiving reports before a liability is recorded?
- Are journal entries authorized at appropriate levels?
Required: For each preceding item:
- Identify the management assertion to which it applies.
- Specify one test of controls auditors could use to determine whether the control was operating effectively.
- Give an example of an error or fraud that could occur if the control were absent or ineffective.
4.Write a substantive procedure that could find errors or frauds that could result from the absence or ineffectiveness of the control items.
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