Audit Chapter 8
"All purchase orders are supported by requisitions from proper persons" is a specific example of which management assertion? A) Occurrence B) Completeness C) Cutoff D) Classification
A
A client's purchasing system ends with the recording of a liability and its eventual payment. Which of the following best describes auditors' primary concern with respect to liabilities resulting from the purchasing system? A) Accounts payable are not materially understated. B) Authority to incur liabilities is restricted to one designated person. C) Acquisition of materials is not made from one vendor or one group of vendors. D) Commitments for all purchases are made only after established competitive bidding procedures are followed.
A
A voucher would typically contain A) a purchase requisition, purchase order, vendor invoice, receiving report, and check copy. B) a purchase requisition, purchase order, sales invoice, receiving report, and check copy. C) a purchase requisition, sales order, sales invoice, receiving report, and check copy. D) a purchase requisition, sales order, vendor invoice, receiving report, and check copy.
A
Auditors ordinarily ascertain whether payroll checks are properly endorsed during the audit of A) clock cards. B) the voucher system. C) cash in bank. D) accrued payroll.
A
Computer controls that might be found in an advanced online acquisition and expenditure system would not include A) all vendor invoices are prenumbered and the numbers accounted for. B) each terminal performs only designated functions. C) an identification number and password are required to enter the nonautomatic purchase orders. D) the check signature is printed using a signature plate that is installed on the computer printer only when checks are printed.
A
For which of the following accounts would the matching concept be the most appropriate? A) Cost of Goods Sold B) Research and Development C) Depreciation Expense D) Sales
A
In determining the effectiveness of an entity's policies and procedures relating to the occurrence assertion for payroll transactions, auditors most likely would inquire about and A) observe the separation of duties concerning personnel responsibilities and payroll disbursement. B) inspect evidence of accounting for prenumbered payroll checks. C) recompute the payroll deductions for employee fringe benefits. D) verify the preparation of the monthly payroll account bank reconciliation.
A
In performing a search for unrecorded retirements of fixed assets, an auditor most likely would A) inspect the property ledger and the insurance and tax records, and then tour the client's facilities. B) tour the client's facilities, and then inspect the property ledger, and the insurance and tax records. C) analyze the repair and maintenance account, and then tour the client's facilities. D) tour the client's facilities, and then analyze the repair and maintenance account.
A
The typical functions of the personnel and payroll cycle would not include A) labor relations. B) report of attendance and work performed. C) allocation to cost of goods sold. D) payroll accounting.
A
Vouchers should be stamped PAID to A) prevent duplicate payment. B) generate a new purchase order. C) indicate posting in the voucher register. D) facilitate preparation of the bank reconciliation.
A
When confirming accounts payable, emphasis should be put on what kind of accounts? A) Accounts with small or zero balances B) All accounts should be equally emphasized. C) Accounts with large balances D) Accounts listed in the accounts payable subsidiary
A
When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would be A) vendors with whom the entity has previously done business. B) amounts recorded in the accounts payable subsidiary ledger. C) payees of checks drawn in the month after the year-end. D) invoices filed in the entity's open invoice file.
A
Which of the following accounts would most likely be audited in connection with a related balance sheet account? A) Property Tax Expense B) Payroll Expense C) Research and Development D) Legal Expense
A
Which of the following audit procedures is best for identifying unrecorded accounts payable? A) Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period B) Investigating payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports C) Examining unusual relationships between monthly accounts payable balances and recorded cash payments D) Reconciling vendors' statements to the file of receiving reports to identify items received just prior to the balance sheet date
A
Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries? A) Personnel B) Treasurer C) Controller D) Payroll
A
Which of the following fraud detection steps could not be performed by CAATs? A) Look for photocopies in invoice files. B) Look for vendor invoices in numerical order. C) Look for vendor invoices slightly below the approval threshold. D) Look for duplicate vendor numbers.
A
Which of the following functional responsibilities would not typically relate to salaried employees? A) Collecting timekeeping data B) Supervision C) Personnel or labor relations D) Payroll distribution
A
"Recorded vouchers (accounts payable entries) in the voucher register (e.g., purchases journal) supported by completed voucher documentation" is a specific example of which management assertion? A) Classification B) Occurrence C) Completeness D) Cutoff
B
A CPA learns that his client has paid a vendor twice for the same shipment; once based upon the original invoice and once based upon the monthly statement sent from the vendor. A control procedure that should have prevented this duplicate payment is A) prenumbering of disbursement vouchers. B) attachment of the receiving report to the disbursement report. C) use of a limit or reasonableness test. D) prenumbering of receiving reports.
B
An auditor is planning the testing of the accounts payable balance. The auditor's main concerns should be A) existence and accuracy. B) completeness and cutoff. C) occurrence and cutoff. D) valuation and accuracy.
B
An auditor vouched data for a sample of employees in a payroll register to approved clock card data to provide assurance that A) payments to employees are computed at authorized rates. B) employees work the number of hours for which they are paid. C) separation of duties exists between the preparation and distribution of the payroll. D) internal controls relating to unclaimed payroll checks are operating effectively.
B
An auditor wishes to perform tests of controls on a client's purchasing procedures. If the control activities leave no audit trail of documentary evidence, the auditor most likely will test the procedures by A) confirmation and observation. B) observation and inquiry. C) analytical procedures and confirmation. D) inquiry and analytical procedures.
B
An entity's internal control structure requires for every check request that there be an approved voucher, supported by a prenumbered purchase order and a prenumbered receiving report. To determine whether checks are being issued for unauthorized expenditures, an auditor most likely would select items for testing from the population of all A) purchase orders. B) canceled checks. C) receiving reports. D) approved vouchers.
B
For the copy of the purchase order that goes to the receiving department, it is best to A) leave off the description of the goods ordered. B) leave off the quantity of the goods ordered. C) leave off the name of the vendor. D) have the receiving department forward all copies of the purchase order to accounts payable.
B
In a test of controls, auditors may trace receiving reports to vouchers recorded in the voucher register. This is a test for A) occurrence. B) completeness. C) classification. D) cutoff.
B
Matthew Corp. has changed from a system of recording time worked on clock cards to a computerized payroll system in which employees record time in and out with magnetic cards. The computerized system automatically updates all payroll records. Because of this change, A) a generalized computer audit plan must be used. B) part of the audit trail is altered. C) the potential for payroll-related fraud is diminished. D) transactions must be processed in batches.
B
Small Corporation uses a Wages Clearing Account for its payroll disbursements. At the end of February, a reasonably large debit balance remained in this account. The most likely reason for this is that A) more labor cost had been assigned to the expense accounts than had been paid. B) some labor cost had not been properly classified in the expense accounts. C) some employees had not yet cashed their checks. D) not enough cash had been transferred to the bank account.
B
The inherent risk that accounts payable may be omitted or otherwise understated typically is A) low. B) high. C) moderate. D) indeterminate.
B
To provide assurance that each voucher is submitted and paid only once, an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is A) supported by a vendor's invoice. B) stamped "paid" by the check signer. C) prenumbered and accounted for. D) approved for authorized purchases.
B
What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices? A) Purchase requisitions and accounts payable entries B) Receiving reports and purchase orders C) Purchase requisitions and purchases orders D) Purchase orders and bid quotes
B
When auditing PP&E, the auditor's approach is generally to A) examine evidence supporting the amounts in the ending balance. B) examine evidence supporting additions during the year. C) follow a reliance strategy, testing internal controls and analytical procedures. D) concentrate on finding unrecorded assets.
B
Which of the following is the best audit procedure for determining the existence of unrecorded liabilities? A) Examine confirmation requests returned by creditors whose accounts are on a subsidiary trial balance of accounts payable. B) Examine a sample of cash disbursements in the period subsequent to year-end. C) Examine a sample of invoices a few days prior to and subsequent to year-end to ascertain whether they have been properly recorded. D) Examine unusual relationships between monthly accounts payable and recorded purchases.
B
Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure? A) Purchase orders are not prepared for services acquired directly under authorization of department heads. B) The same person authorizes voucher packages and signs checks. C) Unacceptable goods are not scheduled on receiving reports. D) The same person signs checks and stamps vouchers PAID.
B
Which of the following situations represents an internal control weakness in the payroll department? A) Payroll department personnel are rotated in their duties. B) Paychecks are distributed by the employees' immediate supervisor. C) Payroll records are reconciled with quarterly tax reports. D) The timekeeping function is independent of the payroll department.
B
Which of the following would detect the understatement of a purchase discount? A) Verify the arithmetic accuracy of the purchases journal B) Compare purchase disbursement records and checks with invoice terms C) Compare approved purchase orders to receiving reports D) Verify the receipt of items ordered and invoiced
B
Which of the following would not typically be a specific relevant assertion about fixed asset accounts? A) Fixed assets in the accounts exist and are in productive use. B) Net carrying book values in the accounts are reflected at current market values. C) Depreciation has been calculated properly using accepted methods and reasonable estimates of useful life and other factors. D) Fixed assets are properly classified in the balance sheet under appropriate descriptive captions.
B
A liability for a long-term purchase contract should generally be recognized when A) the contract is signed. B) the goods are shipped. C) the goods are received. D) the goods are sold to match the cost.
C
An audit plan for accounts payable would not include which of the following procedures? A) Obtaining a trial balance of recorded accounts payable B) Sending confirmation to accounts with zero balances C) Reviewing cash receipts for the period after year-end D) Obtaining written client representations about related-party payables and pledges of assets as collateral for liabilities
C
An audit team most likely would assess control risk at the maximum if the payroll department supervisor is responsible for A) examining authorization forms for new employees. B) comparing payroll registers with original batch transmittal data. C) authorizing payroll rate changes for all employees. D) hiring all subordinate payroll department employees.
C
An auditor most likely would assess control risk at the maximum if the payroll department supervisor is responsible for A) examining authorization forms for new employees. B) comparing payroll registers with original batch transmittal data. C) distribute payroll checks to all employees. D) hiring all subordinate payroll department employees.
C
An auditor most likely would extend substantive tests of payroll when A) payroll is extensively audited by the state government. B) payroll expense is substantially higher than in the prior year. C) overpayments are discovered in performing tests of controls. D) employees complain to management about too much overtime.
C
An auditor most likely would perform substantive procedures on payroll transactions and balances when A) cutoff tests indicate a substantial amount of accrued payroll expense. B) the assessed level of control risk relative to payroll transactions is low. C) analytical procedures indicate unusual fluctuations in recurring payroll entries. D) accrued payroll expense consists primarily of unpaid commissions.
C
An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal. The purpose of this substantive audit procedure most likely was to A) identify usually large purchases that should be investigated further. B) verify that cash disbursements were for goods actually received. C) determine that purchases were properly recorded. D) test whether payments were for goods actually ordered.
C
Cutoff 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 A) valuation or allocation. B) existence or occurrence. C) completeness. D) rights and obligations.
C
Effective control over the cash payroll function would mandate which of the following? A) The payroll clerk should fill the envelopes with cash and include a computation of the net wages. B) The paymaster should be retain unclaimed payroll envelopes. C) Each employee should be asked to sign a receipt for wages received. D) A separate checking account for payroll should be maintained.
C
Failure to record a liability generally results in A) an understatement of profit. B) an understatement of current ratio. C) an overstatement of profit. D) an overstatement of assets.
C
Improperly capitalizing an expense item results in. A) understatement of profit in the current year and overstatement in future years. B) understatement of profit in the current year and in future years. C) overstatement of profit in the current year and understatement in future years. D) overstatement of profit in the current year and in future years.
C
L. Curtis, a maintenance supervisor, submitted maintenance invoices from a phony repair company and received the checks at a post office box. This should have been prevented by A) comparison of the company name to the approved vendor list by the check signer. B) recognition of the excess maintenance costs by Curtis's supervisor. C) refusal by the purchasing department to approve the vendor. D) All of these
C
Purchase cutoff procedures should be designed to produce evidence of whether merchandise is included in the inventory of the client company if the company A) has paid for the merchandise. B) has physical possession of the merchandise. C) holds legal title to the merchandise. D) holds the shipping documents for the merchandise issued in the company's name.
C
Specific balance assertions typical of accounts payable would not include A) recorded liabilities are obligations of the entity. B) estimated liabilities are properly valued. C) accounts payable are not pledged as collateral. D) payables are recorded in the proper period.
C
The auditor decided to test accounts payable by sending open-ended (blank) confirmations to selected vendors. The auditor's best approach in selecting the vendor accounts to confirm is to A) select vendor accounts with large balances. B) select vendor accounts at random in order to apply a statistical sampling procedure. C) select vendor accounts based on the number of purchases from vendors during the year. D) select vendor accounts that are past due.
C
The auditor traces items from the receiving reports to the accounts payable journal in order to satisfy the A) existence assertion. B) rights and obligations assertion. C) completeness assertion. D) valuation assertion.
C
The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the A) human resources function from the controllership function. B) administrative controls from the internal accounting controls. C) authorization of transactions from the custody of related assets. D) operational responsibility from the recordkeeping responsibility.
C
To determine whether accounts payable are complete, auditors perform a test to verify that all merchandise received has been recorded. The population for this test consists of all A) vendors' invoices. B) purchase orders. C) receiving reports. D) canceled checks.
C
Tracing a sample of time clock cards to payroll registers (journals) is a procedure designed to obtain evidence about the transaction assertion(s) of A) occurrence only. B) occurrence and accuracy only. C) completeness only. D) accuracy only.
C
When auditing liabilities account balances, auditors are most concerned with management' assertion about A) existence. B) rights and obligations. C) completeness. D) valuation and allocation
C
When goods are received, the receiving clerk should match the goods with the A) purchase order and the requisition form. B) vendor's invoice and the receiving report. C) vendor's shipping document and the purchase order. D) receiving report and the vendor's shipping document.
C
When verifying debits to the perpetual inventory records of a nonmanufacturing company, auditors would be most interested in examining a sample of purchase A) approvals. B) requisitions. C) invoices. D) orders.
C
Which of the following accounts does not appear in the acquisition and expenditure cycle? A) Cash B) Purchases Returns C) Sales Returns D) Prepaid Insurance
C
Which of the following client control activities is not usually performed in the vouchers payable (accounts payable) department? A) Determining the mathematical accuracy of the vendors' invoices B) Writing checks for the treasurer's signature to take advantage of purchase discounts C) Controlling the mailing of the check and remittance advice D) Checking the prices on the vendor's invoice
C
Which of the following controls should prevent an invoice for the purchase of merchandise from being paid twice? A) The check signer accounts for the numerical sequence of receiving reports used in support of each payment. B) An individual independent of cash operations prepares a bank reconciliation. C) The check signer reviews and cancels the voucher packets. D) Two check signers are required for all checks over a specified amount.
C
Which of the following is not a major control risk in the payroll cycle? A) Paying fictitious "employees" B) Overpaying for time or production C) Losing employees to competitors D) Incorrect accounting for costs or expenses
C
Which of the following personnel department procedures reduces the risk of payroll fraud and represents an appropriate responsibility for the department? A) Distributing paychecks B) Authorizing overtime hours C) Authorizing the addition or deletion of employees from the payroll D) Collecting and retaining unclaimed paychecks
C
Which of the following procedures is least likely to be performed before the balance-sheet date? A) Observation of inventory B) Review of internal control over cash disbursements C) Search for unrecorded liabilities D) Confirmation of receivables
C
Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities? A) Trace a sample of accounts payable entries recorded just before year-end to the unmatched receiving report file. B) Compare a sample of purchase orders issued just after year-end with the year-end accounts payable trial balance. C) Vouch a sample of cash disbursements recorded just after year-end to receiving reports and vendor invoices. D) Scan the cash disbursements entries recorded just before year-end for indications of unusual transactions.
C
Which of the following would not overstate current-period net income? A) Capitalizing an expenditure that should be expensed B) Failing to record a liability for an expenditure C) Failing to record a check paying an item in vouchers payable D) All of these would overstate net income
C
A furniture company ordered 84 tables from a supplier. The supplier accidentally sent only 48 tables, but the receiving department at the furniture company accepted the tables. The invoice was eventually received but was for the 84 tables ordered. The furniture company paid the entire amount. Which of the following controls would have been least likely to have prevented this erroneous payment? A) The copy of the purchase order sent to the furniture company's receiving department should not have shown an expected quantity. B) Personnel in the furniture company's accounts payable department should compare the receiving report to the purchase invoice before creation of the voucher. C) Personnel in the furniture company's cash disbursements department should compare the check that is prepared to all of the backup documentation. D) Personnel in the furniture company's purchasing department should compare the purchase requisition to the purchase order.
D
A large retail enterprise has established a policy that requires the paymaster to deliver all unclaimed payroll checks to the internal audit department at the end of each payroll distribution day. This policy was most likely adopted to A) ensure that employees who were absent on a payroll distribution day are not paid for that day. B) prevent the paymaster from cashing checks that are unclaimed for several weeks. C) prevent a bona fide employee's check from being claimed by another employee. D) detect any fictitious employee who may have been placed on the payroll.
D
A voucher package is used to A) document receipt of inventory. B) document completion of services. C) document a purchase contract. D) provide a source document for recording the purchase of a good or service.
D
A weakness in internal control over recording retirements of equipment may cause an auditor to A) inspect certain items of equipment in the plant and trace those items to the accounting records. B) review the subsidiary ledger to ascertain whether depreciation was taken on each item of equipment during the year. C) trace additions to the "other assets" account to search for equipment that is still on hand but no longer being used. D) select certain items of equipment from the accounting records and locate them in the plant.
D
An audit team would most likely examine the detail support for which of the following charges? A) Payroll expense B) Cost of goods sold C) Supplies expense D) Legal expense
D
An internal control questionnaire for payroll processing occurrence assertion would not include which of the following questions? A) Are names of terminated employees reported in writing to the payroll department? B) Is the payroll compared to personnel files periodically? C) Are checks distributed by the employee's immediate supervisor? D) Are all wage rates determined by contract or approved by a personnel officer?
D
Auditors may conclude that depreciation charges are too small by noting A) insured values much larger than book values. B) large numbers of fully depreciated assets. C) frequent trade-ins of relatively new assets. D) large and frequent losses on assets retired.
D
Cash disbursements are authorized by A) purchase orders. B) invoices. C) receiving reports. D) a complete voucher package.
D
R. Budd, the purchasing agent of Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a cash-on-delivery (COD) basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control over A) purchase requisitions. B) cash receipts. C) perpetual inventory records. D) purchase orders.
D
Substantive tests of account balances in the payroll cycle are likely to include the following procedures except A) analytical review procedures. B) recalculation of accruals. C) comparison of accruals to subsequent payments. D) detail vouching of payroll expense entries.
D
The permanent reference files (master files) in a personnel and payroll database ordinarily do not include which of the following? A) Deduction table B) Payroll master C) Compensation table D) Employee earning record
D
The sampling unit in a test of controls pertaining to the existence or occurrence of payroll transactions ordinarily is a(an): A) clock card or time ticket. B) employee Form W-2. C) employee personnel record. D) payroll register (journal) entry.
D
The usual source for journal entries posted to the general ledger to record the purchase of inventory is A) sales invoices updated with cost data from the inventory records department. B) purchase invoices updated with cost data from the inventory records department. C) receiving reports updated with cost data from the accounts payable department. D) vouchers payable journal from the accounts payable department.
D
To test the transaction assertion of occurrence in the area of payroll, the auditor most likely would A) select a sample of personnel files and trace the pay rate to union contracts or other rate rights and obligations. B) select a sample of personnel files and trace the pay rate to payroll department files used in payroll preparation. C) select a sample of payroll register entries and recalculate gross pay, deductions, and net pay. D) select a sample of payroll register entries and vouch hours worked to clock time cards.
D
When auditing merchandise inventory at year-end, the auditor performs a purchase cutoff test to obtain evidence that A) all goods purchased before year-end are received before the physical inventory count. B) no goods held on consignment for customers are included in the inventory balance. C) no goods observed during the physical count are pledged or sold. D) all goods owned at year-end are included in the inventory balance.
D
Which of the following accounts would most likely be reviewed by the auditor to gain reasonable assurance that additions to the equipment account are not understated? A) Depreciation expense B) Gain on disposal of equipment C) Accounts payable D) Repairs and maintenance expense
D
Which of the following expense accounts would not normally be tested by listing all debits and examining any significant items? A) Legal Expense B) Miscellaneous Expense C) Repairs and Maintenance D) Payroll Expense
D
Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time? A) Vouchers should be prepared by individuals who are responsible for signing disbursement checks. B) Disbursement vouchers should be approved by at least two responsible management officials. C) The date on a disbursement voucher should be within a few days of the date the voucher is presented for payment. D) The official who signs the check should compare the check with the voucher and should stamp PAID on the voucher documents.
D
Which of the following procedures would an auditor most likely perform in searching for unrecorded payables? A) Reconcile receiving reports with related cash payments made just prior to year-end. B) Contrast the ratio of accounts payable to purchases with the prior year's ratio. C) Vouch a sample of creditor balances to supporting invoices, receiving reports, and purchase orders. D) Compare cash payments occurring after the balance sheet date with the accounts payable trial balance.
D
Which of the following would be an indicator of potential fraud? A) Photocopies of invoices in the voucher file B) Vendor invoices in numerical order C) Vendors with only post office box addresses D) All of these indicate potential fraud.
D
Which of the following would not be included in the supporting documents for a voucher? A) Purchase order B) Vendor invoice C) Receiving report D) Blank check
D
1) Acquisition and expenditure activities include (1) purchasing goods and services, (2) receiving the goods or services, (3) recording the asset or expense and related liability, and (4) depreciating assets purchased.
False
If a person is absent from the company due to illness or vacation, their paycheck should be returned to the payroll department.
False
In order to ensure appropriate segregation of duties, the supervisor in each department handles the custody of the payroll checks.
False
Proper separation of duties involves the purchasing department as the recordkeeping function.
False
Purchases are requisitioned by a purchasing department that seeks the best prices and quality.
False
The accounts payable department reconciles the vendor invoice, purchase order, and receiving report prior to approving the payment to the vendor.
False
The payroll department approves payroll hours prior to processing the payroll.
False
The principal goal of the physical inspection of property, plant, and equipment is to determine actual valuation of property.
False
The receiving department receives a "blind" copy of the purchase order which does not include the vendor's name and address.
False
Unrecorded liabilities can be prevented if there is an appropriate segregation of duties in accounts payable.
False
________ and ________ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed.
System failures; human coding errors
________ consist of (1) identification of data population for audit and (2) an expression of the action to be taken to produce relevant audit evidence.
Test of controls
) If internal controls over the expenditure cycle are weak, auditors will need to design substantive procedures to try to detect whether control failures have produced misleading financial statement account balances.
True
Auditors should inspect the "unmatched receiving report" file to determine whether the liability for the receipt of goods has been recorded.
True
Bill of ladings for goods shipped from a vendor to the purchasing company should always include the company's purchase order number.
True
Changes to the payroll master file should be approved by human resources department.
True
If the risk of material misstatement is assessed as high, it is likely that additional substantive procedures will be required.
True
Paychecks should be written to a payroll bank account that is used only for payroll.
True
The auditors' "search for unrecorded liabilities" should emphasize payments made shortly after the end of the year.
True
The emphasis is on the completeness assertion because financial statement users tend to be more concerned about understated expenses and liabilities than overstated.
True
Tracing the payables to the cash disbursements journal can provide the evidence regarding the valuation of accounts payable.
True
When considering assertions and obtaining evidence about accounts payable, auditors must put emphasis on the ________ assertion.
completeness
A list of all purchases might exist only in a ________ file rather than a ________.
computer transaction; purchase journal
A personnel file should establish the reality of a person's ________ and ________.
existence; employment
The ________ is the primary original record for payroll accounting.
payroll register
The ________ has transaction initiation authority to add new employees and delete terminated employees
personnel department
The five functional responsibilities of a payroll cycle are ________, ________, ________, and ________.
personnel; supervision; timekeeping; record keeping; payroll distribution
When the ________, ________ and ________ are in hand, the accountants can record the accounts payable.
purchase order; vendor's invoice; receiving report
Vendor invoices should be compared to ________ and ________ to determine that the vendor is charging the approved price and for quantity received.
purchase orders; receiving reports
The ________ inspects the goods received for ________ and ________ and then puts them in the hands of other responsible persons.
receiving department; quantity; quality
Assessment of ________ of ________ is important because it governs the nature, timing, and extent of substantive procedures that will be applied in the audit of account balances in the acquisition cycle.
risk; material misstatement
The ________ is a set of procedures designed to yield audit evidence of liabilities that were not recorded in the reporting period.
search for unrecorded liabilities
Auditors can compare the ________ file to the ________ to determine whether the company has material unrecorded liabilities on the financial statement date.
unmatched receiving reports; payables listing
A ________ is a cover sheet containing all supporting documentation for an acquisition.
voucher