8.37 Prevent controls LO1, 3

(a) Identify the key assertion at risk for payables in relation to payments made prior to receipt of goods.

(b) For the control procedures (1) to (5) for payables:

i. Identify the key preventative internal control that directly addresses the risk of payments being made by Everfree Forest Hospital to its suppliers before the goods are received.

ii. Outline how your choice of the internal control in (i) will prevent payment to suppliers prior to receipt of goods.

iii. Design and describe in detail an appropriate test of control that you would use to satisfy yourself about the effectiveness of this internal control.