Audit Chapter 11 HW Flashcards
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- Checks are signed by the company president, who compares the checks with the underlying supporting documents
Adequate separation of duties and Independent checks on performance
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- Sales invoices are matched with shipping documents by the computer system and an exception report is generated
Adequate documents and records
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- Receiving reports are prenumbered and accounted for on a daily basis
Adequate documents and records
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- The accounts receivable master file is reconciled each month to the general ledger
Independent checks on performance
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- Sales invoices are independently verified before being sent to customers
Independent checks on performance
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- Payments by check are received in the mail by the receptionist, who lists the checks and restrictively endorses them
Adequate separation of duties
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- Labor hours for payroll are reviewed for reasonableness by the computer system
Independent checks on performance and proper authorization of transactions
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
8.Unmatched shipping documents are accounted for on a daily basis
Physical control over documents and records
For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as proper authorization and adequate documents and records.)
- The computer system verifies that all payroll payments have a valid employee identification number assigned by the human resources department at the time of hiring
Adequate separation of duties
For each internal control, identify the transaction-related audit objective(s) to which it applies
- Checks are signed by the company president, who compares the checks with the supporting documents
Occurrence and Accuracy
For each internal control, identify the transaction-related audit objective(s) to which it applies
- Sales invoices are matched with shipping documents by the computer system and an exception report is generated
Occurrence
For each internal control, identify the transaction-related audit objective(s) to which it applies
- Receiving reports are prenumbered and accounted for on a daily basis
Completeness and Timing
For each internal control, identify the transaction-related audit objective(s) to which it applies
4.The accounts receivable master file is reconciled each month to the general ledger
Posting and summarization
For each internal control, identify the transaction-related audit objective(s) to which it applies
- Sales invoices are independently verified before being sent to customers
Accuracy
For each internal control, identify the transaction-related audit objective(s) to which it applies
- Payments by check are received in the mail by the receptionist, who lists the checks and restrictively endorses them
Completeness
For each internal control, identify the transaction-related audit objective(s) to which it applies
7. Labor hours for payroll are reviewed for reasonableness by the computer system
Occurrence and Accuracy
For each internal control, identify the transaction-related audit objective(s) to which it applies
- Unmatched shipping documents are accounted for on a daily basis
Completeness and Timing
For each internal control, identify the transaction-related audit objective(s) to which it applies
- The computer system verifies that all payroll payments have a valid employee identification number assigned by the human resources department at the time of hiring
For each misstatement, identify one or more types of controls that were absent
- On the last day of the year, a truckload of beef as set aside for shipment but was not shipped. Because it was still on hand the inventory was counted. The shipping document was dated last day of the year, so it was also included as a current-year sale
Adequate documents and records and independent checks on performance
For each misstatement, identify one or more types of controls that were absent
- The incorrect price was used on sales invoices for billing shipments to customers because the wrong price was entered into the computer master file of prices
Adequate documents and records and independent checks on performance
For each misstatement, identify one or more types of controls that were absent
- A vendor invoice was paid even though no merchandise was ever received. The accounts payable software application does not require the input of a valid receiving report number before payment can be made
Proper authorization of transactions and adequate documents and records
For each misstatement, identify one or more types of controls that were absent
- Employees in the receiving department took sides of beef for their personal use. When a shipment of meat was received, the receiving department filled out a receiving report and forwarded it to the accounting department for the amount of goods actually received. At the time, two sides of beef were put in an employee’s pickup truck rather than in the storage freezer.
Adequate documents and records, physical control over assets and records, and independent checks on performance
For each misstatement, identify one or more types of controls that were absent
- An accounts payable clerk processed payments to himself by adding a fictitious vendor address to the approved vendor master file
Adequate separation of duties
For each misstatement, identify one or more types of controls that were absent
- During the physical count of inventory of the retail grocery, one counter wrote down the wrong description of several products and miscounted the quantity
Independent checks on performance
For each misstatement, identify one or more types of controls that were absent
- A salesperson sold an entire carload of lamb at a price below cost because she did not know the cost of lamb had increased in the past week
Proper authorization of transactions and activities
For each misstatement, identify one or more types of controls that were absent
- A vendor’s invoice was paid twice for the same shipment because the vendor sent a duplicate copy of the original 2 weeks after the payment was due
Adequate documents and records
For each misstatement, identify the transaction-related audit objectives impacted
- On the last day of the year, a truckload of beef as set aside for shipment but was not shipped. Because it was still on hand the inventory was counted. The shipping document was dated last day of the year, so it was also included as a current-year sale
Timing
For each misstatement, identify the transaction-related audit objectives impacted
- The incorrect price was used on sales invoices for billing shipments to customers because the wrong price was entered into the computer master file of prices
Accuracy
For each misstatement, identify the transaction-related audit objectives impacted
- A vendor invoice was paid even though no merchandise was ever received. The accounts payable software application does not require the input of a valid receiving report number before payment can be made
Occurrence
For each misstatement, identify the transaction-related audit objectives impacted
- Employees in the receiving department took sides of beef for their personal use. When a shipment of meat was received, the receiving department filled out a receiving report and forwarded it to the accounting department for the amount of goods actually received. At the time, two sides of beef were put in an employee’s pickup truck rather than in the storage freezer.
Occurrence
For each misstatement, identify the transaction-related audit objectives impacted
- An accounts payable clerk processed payments to himself by adding a fictitious vendor address to the approved vendor master file
Occurrence
For each misstatement, identify the transaction-related audit objectives impacted
- During the physical count of inventory of the retail grocery, one counter wrote down the wrong description of several products and miscounted the quantity
Accuracy
For each misstatement, identify the transaction-related audit objectives impacted
- A salesperson sold an entire carload of lamb at a price below cost because she did not know the cost of lamb had increased in the past week
Accuracy
For each misstatement, identify the transaction-related audit objectives impacted
- A vendor’s invoice was paid twice for the same shipment because the vendor sent a duplicate copy of the original 2 weeks after the payment was due
Occurrence
