SU7 Purchases, payroll, and other cycles

Question 1

Managements responsibility over purchases, payroll, and other cycles:

Answer 1

1. Proper authorization
2. Proper order quality and quantity
3. acceptance of goods
4. proper terms
5. payment of authorized goods
6. timely payment

Question 2

Responsibility of personnel in purchases, payroll, and other departments

Answer 2

Inventory control provides authorization and performs accountability, Purchasing agent issues PO’s. Receiving department receives approved purchases, A/P records payment

Question 3

Payroll Technology considerations

Answer 3

access controls, preformatted screens, validity checks, time records were automatically reconciled

Question 4

Deficiency

Answer 4

control doesn’t allow management or employees to perform functions to detect, correct or prevent misstatements on a timely basis

Question 5

Significant defeciency

Answer 5

same as deficiency but important enough to merit attention by management

Question 6

Material weaknesses

Answer 6

combination or single deficiency in internal where there is reasonable possibility that a material misstatement exists in the financial statement