{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-29T01:19:22-04:00", "answer_date": "2024-06-29 01:19:22", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4437030", "url": "\/study-help\/questions\/in-testing-cash-disbursements-for-the-jay-klein-company-you-4437030", "question_creation_date_js": "2024-06-29T01:19:22-04:00", "question_creation_date": "Jun 29, 2024 01:19 AM", "meta_title": "[Solved] In testing cash disbursements for the Jay | SolutionInn", "meta_description": "Answer of - In testing cash disbursements for the Jay Klein Company, you obtained an understanding of internal control. The contro | SolutionInn", "meta_keywords": "testing,cash,disbursements,jay,klein,company,obtained,understanding,internal,control,controls,good", "question_title_h1": "In testing cash disbursements for the Jay Klein Company, you obtained an understanding of internal control. The controls are reasonably good, and no unusual audit", "question_title": "In testing cash disbursements for the Jay Klein Company, you obtained an", "question_title_for_js_snippet": "In testing cash disbursements for the Jay Klein Company, you obtained an understanding of internal control The controls are reasonably good, and no unusual audit problems arose in previous years Although there are not many individuals in the accounting department, there is a reasonable separation of duties in the organization There is a separate purchasing agent who is responsible for ordering goods and a separate receiving department that counts the goods when they are received and prepares receiving reports There is a separation of duties between recording acquisitions and cash disbursements, and all information is recorded in the two journals independently The controller reviews all supporting documents before signing the checks, and he immediately mails the checks to the vendors Check copies are used for subsequent recording All aspects of internal control seem satisfactory to you, and you perform minimum tests of 25 transactions as a means of assessing control risk In your test, you discover the following exceptions Required a Identify whether each of 1 through 7 is a control test deviation, a monetary misstatement, or both b For each exception, identify which transaction related audit objective was not met c What is the audit importance of each of these exceptions d What follow up procedures would you use to determine more about the nature of each exception e How would each of these exceptions affect the rest of your audit Be specific f Identify internal controls that should have prevented each misstatement 1)One check amount in the cash disbursements journal was for $100 less than the amount stated on the vendor's invoice 2)One voided check was missing 3)One invoice was paid twice The second payment was supported by a duplicate copy of the invoice Both copies of the invoice were marked paid 4)Two items in the acquisitions journal were misclassified 5)Three invoices were not initialed by the controller, but there were no dollar misstatements evident in the transactions 6)Five receiving reports were recorded in the acquisitions journal at least two weeks later than their date on the receiving report 7)Two receiving reports for vendors' invoices were missing from the transaction packets One vendor's invoice had an extension error, and the invoice was initialed that the amount had been checked ", "question_description": "

In testing cash disbursements for the Jay Klein Company, you obtained an understanding of internal control. The controls are reasonably good, and no unusual audit problems arose in previous years.<\/p>

Although there are not many individuals in the accounting department, there is a reasonable separation of duties in the organization. There is a separate purchasing agent who is responsible for ordering goods and a separate receiving department that counts the goods when they are received and prepares receiving reports. There is a separation of duties between recording acquisitions and cash disbursements, and all information is recorded in the two journals independently. The controller reviews all supporting documents before signing the checks, and he immediately mails the checks to the vendors. Check copies are used for subsequent recording. <\/p>

All aspects of internal control seem satisfactory to you, and you perform minimum tests of 25 transactions as a means of assessing control risk. In your test, you discover the following exceptions:<\/p>

Required:<\/p>

a.Identify whether each of 1 through 7 is a control test deviation, a monetary misstatement, or both.<\/p>

b.For each exception, identify which transaction-related audit objective was not met.<\/p>

c.What is the audit importance of each of these exceptions?<\/p>

d.What follow-up procedures would you use to determine more about the nature of each exception?<\/p>

e.How would each of these exceptions affect the rest of your audit? Be specific. <\/p>

f.Identify internal controls that should have prevented each misstatement.<\/p>

<\/p>

1)One check amount in the cash disbursements journal was for $100 less than the amount stated on the vendor's invoice. <\/p>

2)One voided check was missing.<\/p>

3)One invoice was paid twice. The second payment was supported by a duplicate copy of the invoice. Both copies of the invoice were marked \"paid.\"<\/p>

4)Two items in the acquisitions journal were misclassified.<\/p>

5)Three invoices were not initialed by the controller, but there were no dollar misstatements evident in the transactions.<\/p>

6)Five receiving reports were recorded in the acquisitions journal at least two weeks later than their date on the receiving report.<\/p>

7)Two receiving reports for vendors' invoices were missing from the transaction packets. One vendor's invoice had an extension error, and the invoice was initialed that the amount had been checked. <\/p>", "transcribed_text": "", "related_book": { "title": "Intermediate Accounting", "isbn": "470964731, 978-0470964736, 978-0470161012", "edition": "9th Canadian Edition, Volume 2", "authors": "Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/516.jpg", "uri": "\/textbooks\/intermediate-accounting-9th-canadian-edition-volume-2-516", "see_more_uri": "" }, "free_related_book": { "isbn": "1782628746", "uri": "\/textbooks\/membrane-engineering-for-the-treatment-of-gases-gas-separation-issues-with-membranes-volume-1-2nd-edition-9781782628743-9781788010436", "name": "Membrane Engineering For The Treatment Of Gases Gas Separation Issues With Membranes Volume 1", "edition": "2nd\u00a0Edition" }, "question_posted": "2024-06-29 01:19:22", "see_more_questions_link": "\/study-help\/questions\/business-economics-2023-September-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/use-the-ideal-gas-equation-of-state-to-estimate-the", "description": "Use the ideal gas equation of state to estimate the molar volume in m3tmol and the density of air in kg\/m 3 at 40C and a gauge pressure of 3.0atm.", "stars": 3 }, { "url": "\/study-help\/introduction-to-probability-statistics\/the-distribution-function-of-the-random-variable-x-is-ft-1983973", "description": "The distribution function of the random variable X is F(t) = 1 e5t3 , t 0. 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