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Exam 8: Acquisition and Expenditure Cycle

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Question 51

Multiple Choice

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Auditors ordinarily ascertain whether payroll checks are properly endorsed during the audit of

A) clock cards.
B) the voucher system.
C) cash in bank.
D) accrued payroll.

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Question 52

Multiple Choice

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Which of the following procedures is least likely to be performed before the balance-sheet date?

A) Observation of inventory.
B) Review of internal control over cash disbursements.
C) Search for unrecorded liabilities.
D) Confirmation of receivables.

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Question 53

Multiple Choice

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An entity's internal control structure requires for every check request that there be an approved voucher,supported by a prenumbered purchase order and a prenumbered receiving report.To determine whether checks are being issued for unauthorized expenditures,an auditor most likely would select items for testing from the population of all

The typical functions of the personnel and payroll cycle would not include

The auditor decided to test accounts payable by sending open-ended (blank) confirmations to selected vendors.The auditor's best approach in selecting the vendor accounts to confirm is to

Which of the following accounts would most likely be audited in connection with a related balance sheet account?

An auditor vouched data for a sample of employees in a payroll register to approved clock card data to provide assurance that

A list of all purchases might exist only in a ____________________________________ file rather than a _____________________________________. Question also found in study guide

Julie works in accounts payable.Her job is to prepare the voucher package and submit the completed voucher to the treasurer's office for payment.When the voucher is paid by the Treasurer's department it is returned to Julie (without the check)for filing. The company receives invoices from Mona's Office Supply.When Julie receives the voucher package back from the Treasurer,Julie scans the invoice from Mona's Office Supply and changes the address so that a duplicate payment is sent to a Mail Boxes Etc.store where Julie rents a mail box under the name Mini's Official Supplies.With the slightly altered invoice (no other changes are made),Julie submits the voucher package a second time.Julie also has a bank account with the name Mini's Official Supplies.When Julie receives the check for Mona's Office Supply,Julie deposits it in her Mini's Official Supplies bank account and then used an ATM card to withdraw the cash. A)Define the internal control weakness that allowed the situation to exist - if any; B)One (and only one)specific internal controls that should be in place to prevent or detect the problem; and C)One (and only one)test of control audit procedure. D)One (and only one)substantive audit procedure that may detect the situation described. No credit will be given for generic controls (e.g.policies and procedures; separation of duties without specifics; discuss with management).Be specific Students may give any of the following There is no mention of the voucher package being marked "Paid" or in some other way be marked so that documents cannot be reused. Have the company mark each document "Paid" so they cannot be reused • Observation of treasurer payment procedures • Inquiry of the treasurer regarding payment procedures • Inspect paid voucher packages for indication of payment on documents • Scan cash disbursements journal for duplicate payments • Perform analytical procedures on office supplies • Check vendor payment addresses with mailbox stores' addresses • Vouch payments to receiving reports and physical supplies

A voucher package is used to

"Recorded vouchers (accounts payable entries) in the voucher register (e.g.,purchases journal) supported by completed voucher documentation" is a specific example of which management assertion?

Which of the following fraud detection steps could not be performed by CAATs?

An auditor most likely would perform substantive procedures on payroll transactions and balances when

Which of the following would be an indicator of potential fraud?

An audit team most likely would assess control risk at the maximum if the payroll department supervisor is responsible for

Auditors should inspect the "unmatched receiving report" file to determine whether the liability for the receipt of goods has been recorded.

For the copy of the purchase order that goes to the receiving department,it is best to

The inherent risk that accounts payable may be omitted or otherwise understated typically is

The payroll department approves payroll hours prior to processing the payroll.

An audit team would most likely examine the detail support for which of the following charges?