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identify the balance-related auditU 13-26 (OBJECTIVES 13-1, 13-4, 13-5) The following are independent internal controls com monly found in the acquisition and payment cycle. Each
identify the balance-related auditU 13-26 (OBJECTIVES 13-1, 13-4, 13-5) The following are independent internal controls com monly found in the acquisition and payment cycle. Each control is to be considered independently 1. Before a check is prepared to pay for acquisitions by the accounts payable depart ment, the related purchase order and receiving report are attached to the vendor's invoice being paid. A clerk compares the quantity on the invoice with the receiving report and purchase order, compares the price with the purchase order, recomputes the extensions, re-adds the total, and examines the account number indicated on the invoice to determine whether it is correctly classified. He indicates his performance of these procedures by initialing the invoice. At the end of each month, an accounting clerk accounts for all prenumbered receiv ing reports (documents evidencing the receipt of goods) issued during the month and traces each one to the related vendor's invoice and acquisitions journal entry. The clerk's tests do not include testing the quantity or description of the merchandise received. 3. The cash disbursements clerk is prohibited from handling cash. The bank account is reconciled by another person even though the clerk has sufficient expertise and time to do it. 4. Before a check is sign ed by the controller, she examines the supporting documenta- tion accompanying the check. At that time, she initials each vendor's invoice to indi- cate her approval 5. After the controller signs the checks, her secretary writes the check number and the date the check was issued on each of the supporting documents to prevent their reuse Required a. For each of the internal controls, state the transaction-related audit objective(s) the control is meant to fulfill. tiveness of the control. whether financial misstatements are actually taking place. oritor cold perform to tesh e c. For each control, list one substantive test the auditor could perform to determine 13-27 (OBIECTIVES 13 The fo
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