The Runge Controls Corporation manufactures and markets electrical control systems: temperature controls, machine controls, burglar alarms, and the like. Electrical and semiconductor parts are acquired from outside vendors, and systems are assembled in Runge€™s plant. The company incurs other administrative and operating expenditures.
Liabilities for goods and services purchased are entered in an accounts payable journal, at which time the debits are classified to the asset and expense accounts they apply to. The company has specified control procedures for approving vendor invoices for payment, for signing cheques, for keeping records, and for reconciling the chequing accounts. The procedures appear to be well-specified and placed in operation. You are the senior auditor on the engagement, and you need to specify a program (list) of control tests to audit the effectiveness of the controls over cash disbursements.

Required:
Using the seven general internal control objectives discussed in Chapter 9, specify two or more control tests to audit the effectiveness of typical control procedures. Organize your list according to the example shown below for the completenessobjective.

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CONTROL OBJECTIVE SPECIFIC CONTROL OBJECTIVE FOR CASH DISBURSEMENTS TRANSACTIONS TEST OF CONTROLS PROGRAM Completeness All valid cash disbursements are recorded and none Determine the numerical sequence of cheques issued during the are omitted. period and scan the sequence tor missing numbers. (Scan the accounts payable records for amounts that appear to be too long outstanding, indicating liabilities for which payment may have been made but not recorded properly)