The client has the following internal control procedure relating to the purchasing business process:

The accounts payable clerk should compare invoices received from vendors with the purchase orders and the receiving reports for the dates, quantities, prices, and terms of transaction. The accounts payable clerk initials on the voucher request indicating that the comparison has been done.

Required:

Based on the internal control procedure described above,

1. Describe the misstatement in the financial statements that could occur if the internal control procedure is NOT present; and
2. The substantive tests that can be designed by the auditors to evaluate the potential misstatement in the financial statements.