A4 - Expenditure Cycle

Question 1

what assertions are generally more relevant when perform procedures to obtain evidence for AP?

Answer 1

1. Completeness
   + if performing a search for unrecorded liabilities, review cash disbursement made AFTER/SUBSEQUENT year-end and examine supporting docs: open vouchers, receiving reports, vendor’s invoices for items received before year-end but not yet recorded
2. Accuracy

Question 2

what is the source or supporting docs term for AP?

Answer 2

vouchers/voucher packages

Question 3

which departments are responsible for matching docs?

Answer 3

AR and AP department

• AR: match shipping docs, sale orders, and invoices
• AP: match vendor invoices, purchase orders, receiving report

Question 4

what are responsibilities of treasurers?

Answer 4

after receiving the voucher package from accounts payable department => treasurer review the docs, signs, and mails the checks to vendors => then treasurer cancels the voucher packages and maintains them in file.