A 11

In assessing control risk for purchases, an auditor vouches a sample of entries in the voucher register to the supporting documents. Which assertion would this test of controls most likely support?

• Occurrence

• Completeness

• Accuracy

• Classification

The existence assertion for accounts payable includes:

• determining whether all accounts payable actually are liabilities.

• determining whether all accounts payable are recorded in the proper period.

• determining whether all accounts payable are properly classified in the financial statements.

• determining whether all accounts payable are recorded.

The cutoff assertion for accounts payable includes:

• determining whether all accounts payable are recorded.

• determining whether all accounts payable actually are liabilities.

• determining whether all accounts payable are recorded in the proper period.

• determining whether all accounts payable are properly classified in the financial statements.

  determining whether all accounts payable are

To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of all:

• payment vouchers.

• receiving reports.

• purchase requisitions.

• vendors' invoices.

An important primary purpose of the auditor's review of the entity's procurement system should be to determine the effectiveness of the activities to protect against:

• unauthorized persons issuing purchase orders.

• improper materials handling.

• mispostings of purchase returns.

• excessive shrinkage or spoilage.

An entity erroneously recorded a large purchase twice. Which of the following internal controls would be most likely to detect this error in a timely and efficient manner?

• Footing the purchases journal.

• Tracing totals from the purchases journal to the ledger accounts.

• Reconciling vendors' monthly statements with subsidiary payable ledger accounts.

• Sending written quarterly confirmations to all vendors.

An auditor performs a test to determine whether all merchandise was received for which the entity was billed. The population for this test consists of all:

• merchandise received.

• vendors' invoices.

• canceled checks.

• receiving reports

An auditor compares information on canceled checks with information contained in the cash disbursements journal. The objective of this test is to determine that:

• no discrepancies exist between the data on the checks and the data in the journal.

• cash disbursements are for goods and services actually received.

• proper cash purchase discounts have been recorded.

• recorded cash disbursement transactions are properly authorized.

Which of the following procedures would an auditor most likely perform in searching for unrecorded payables?

• Vouch a sample of creditor balances to supporting invoices, receiving reports and purchase orders.

• For cash payments occurring after the balance sheet date, examine the date on the associated receiving report or vendor invoice to determine if it relates to the current audit period.

• Reconcile receiving reports with related cash payments made just prior to year-end.

• Contrast the ratio of accounts payable to purchases with the prior year's ratio.

Tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of:

• occurrence
• classification
• cutoff
• existence