Scenario: Color City Ltd, a wholesaler of stationary, requires all purchases to be authorised by the...
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Scenario: Color City Ltd, a wholesaler of stationary, requires all purchases to be authorised by the Purchasing Manager (Amanda Simmons). When she receives a completed Purchase Order from the clerk, Amanda checks it and, when she is satisfied that it is bona fide, she signs it and forwards for further processing. To test this internal control, the auditor examined a sample of 30 Purchase Orders in order to ascertain whether or not they had been authorised. (a) For the test of control that is stated in the following scenario, answer the following questions. (i) What is the procedure? (ii) What information is used to verify? (iii) Which assertion has been tested? Scenario: Color City Ltd, a wholesaler of stationary, requires all purchases to be authorised by the Purchasing Manager (Amanda Simmons). When she receives a completed Purchase Order from the clerk, Amanda checks it and, when she is satisfied that it is bona fide, she signs it and forwards for further processing. To test this internal control, the auditor examined a sample of 30 Purchase Orders in order to ascertain whether or not they had been authorised. (a) For the test of control that is stated in the following scenario, answer the following questions. (i) What is the procedure? (ii) What information is used to verify? (iii) Which assertion has been tested?
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1 Procedure Firstly Check whether all the authorizations needed are obtained Secondly Check whether ... View the full answer
Related Book For
Managing Supply Chain and Operations An Integrative Approach
ISBN: 978-0132832403
1st edition
Authors: Thomas Foster, Scott E. Sampson, Cynthia Wallin, Scott W Webb
Posted Date:
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