Question

Listed below is a selection of items from the internal control questionnaire on payables shown in Appendix 12A.
1. Are invoices, receiving reports, and purchase orders reviewed by the cheque signer?
2. Are cheques dated in the cheque register with the date of the cheque?
3. Are quantity and quality of goods received determined at time of receipt by receiving personnel independent of the purchasing department?
4. Are suppliers’ invoices matched against purchase orders and receiving reports before a liability is recorded?

Required:
For each one:
a. Identify the control objective to which it applies.
b. Specify one test of controls audit procedure an auditor could use to determine whether the control was operating effectively.
c. Using your business experience, your logic, your imagination, or all three, give an example of an error or fraud that could occur if the control was absent or ineffective.



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  • CreatedJanuary 09, 2015
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