The following internal controls for the acquisition and payment cycle were selected from a standard internal control questionnaire.

Approved purchase orders are required for all acquisitions of goods.

Prenumbered receiving reports are prepared as support for acquisitions and numerically accounted for.

Dates on receiving reports are compared with vendors invoices before entry into the acquisitions journal.

Account classifications are reviewed by someone other than the preparer.

Vendors invoices are recalculated before payment.

All checks are signed by the owner or manager.

The authorized signer compares data on supporting documents with checks and electronic funds transfer authorizations.

Checks are mailed by the owner or a person under her supervision after signing.

All supporting documents are cancelled after checks are signed or electronic funds transfers are approved.

The accounts payable master file is updated, balanced, and reconciled to the general ledger monthly.

Required

e. For each likely misstatement, identify a substantive audit procedure to determine whether the misstatement exists.