Short Answer Questions

1The purchases transaction system is often referred to as the "purchases, payables, payments" (PPP) system.

Required

How is the assessment of control risk for the occurrence of payment transactions related to the assessed control risk for the completeness of the accounts payable balance.

2BC Berry Products Inc. processes various types of fresh berries over multiple plant locations. As a preliminary step in planning the engagement, the plant managers have been asked to provide a written description of their respective procedures for processing payment vouchers for parts and supplies. The following are nine excerpts from one of the written descriptions.

1. The head office purchasing department acts on purchase requisitions issued by the inventory stores department.
2. Orders are placed on pre-numbered purchase order forms.
3. A purchase order copy with all details of items ordered, quantities, and pricing is sent to the receiving and accounts payables department.
4. When goods are received, the receiving department stamps "order received" on its purchase order copy and forwards the annotated order to the accounts payable department.
5. Purchase orders, purchase order copies that have been annotated by the receiving department, and supplier invoices are matched by the accounts payable department.
6. Clerical accuracy of supplier invoices is checked by the accounts payable department.
7. A pre-numbered payment voucher is prepared and forwarded, along with supporting documentation, to the plant controller, who reviews and approves the voucher.
8. Supporting documents are returned to the accounts payable department for filing and approved payment vouchers are forwarded to head office for payment.
9. A report listing cheques issued by head office is received and promptly filed by the accounts payable department.

You are the internal auditor for BC Berry Products, and you have been asked to evaluate the purchasing system.

Required

Foreachof the payment system procedures listed above,explainwhether or not additional procedures should be implemented to improve the internal control.Justify your answers.

3You are the audit senior reviewing the audit work for Online Ltd., a large Canadian company. Online uses a payroll service bureau to process all wages. Time sheets are authorized by the appropriate supervisor, batched, and sent to the service bureau for processing. Detailed payroll reports, as well as the time sheets, are returned to the accountant, who reviews the reports for reasonableness and initials them as evidence of her review.

Required

a.Identify two (2) input, and two (2) output controls that should be implemented when using the services of a payroll service bureau.

b.Describe the additional audit procedures you believe should be performed to ensure that we can rely on the accuracy service bureau payroll calculations.

Could you help me solve these problems?