SOLVED

6) Which one of the following duties should not be assigned the purchases department? A) finding the lowest cost vendor B) reviewing vendors’ catalog descriptions and prices for standardized items C) designing the purchase order form D) authorizing the acquisition of goods 7) The accounts payable department usually has responsibility for approving acquisitions for payment by comparing the details on the: A) vendor’s invoice and the receiving report. B) vendor’s invoice and the purchase requisition. C) purchase order, receiving report, and vendor’s invoice. D) purchase requisition, purchase order, and receiving report. 8) A substantive test for accounts payable that would be used to provide evidence regarding the occurrence assertion would be to: A) agree a sample of vouchers to authorized purchase orders. B) recalculate the accuracy of the vouchers and the authorized purchase orders. C) trace vouchers to the client’s purchases journal. D) vouch a sample of vouchers from the cash disbursements register to accounts payable. 9) A company’s internal control procedures over the acquisition cycle should prevent the preparation of a voucher for goods that have not yet been received. Which of the following is the best procedure to assure vouchers are not prepared for goods not received? A) purchase order and vendor invoice are matched to the receiving report B) compare goods received with goods ordered C) perform sample test counts of items when received D) compare the requisition for goods with the purchase order 10) Which of the following is not a key control in the acquisition and payment cycle? A) Authorization of purchases B) Authorization of credit C) Timely recording and independent review of transactions D) Authorization of payments 11) Proper authorization for acquisition is useful for management as an internal control procedure, because it: A) ensures that goods/services are used efficiently by company employees. B) ensures that goods/services were purchased from approved vendors. C) ensures that goods/services were purchased according to company policy. D) ensures that goods/services were purchased at the lowest possible price. 12) When a client uses perpetual inventory records, the tests of details of balances for inventory can be significantly reduced if the auditor believes the records are accurate. The controls over the acquisitions included in the records are normally tested as a part of the: A) tests of controls. B) tests of controls and tests of transactions. C) tests of details of balances. D) analytical procedures and tests of controls. 13) The auditor’s internal control objective to determine that “recorded acquisitions are for goods and services received” satisfies the audit objective of: A) accuracy. B) occurrence. C) authorization. D) completeness. 14) Failure to record the acquisition of goods is a violation of which audit objective? A) Accuracy B) Occurrence C) Authorization D) Completeness 15) The internal control that requires that “checks are prenumbered and accounted for” satisfies the objective of: A) accuracy. B) existence. C) completeness. D) posting and summarization.