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audit 8

Question	Answer
approved vendor list	A record of vendors that have been vetted to ensure that vendors meet company policy and procedure in terms of price, quality, delivery, etc. This control activity provides evidence to auditors of vendors existence
bill of lading	A contract between the shipper and the carrier; includes shipping information such as ship dates and origination, purchase order number, and signatures for receipt of merchandise
capitalizing	The recording of expenidutres as assets and charging them to expense by a systematic allocation over a number of years
clearing accounts	The temporary storage places for transactions awiaiting final accounting that should eventually have zero balances.
electronic data interchange	The transfer of data between /among different companies using networks such as the internet.
ghost employees	The fictitious or separated employees fraudulently maintained on the payroll to obtain checks.
imprest bank account	An account used for special purposes such as payroll or branch banking that is maintained at a zero or fixed balance in the general ledger. Checks witten on the account are offset by deposits of the same amount
matching	The recognition of expenses in the same period as associated revenues
purchase order	A formal contractual document (may be a computer document) between a buyer and seller issued by the buyer establishing price, delivery point, delivery dates , and other information pertinent to the purchase
purchase requisition	An internal document initialed by a department or person within the entity asking the purchasing department to buy specific goods or services.
receiving report	The documentation completed by the receiving department that includes receiving date and time, purchase order umber, condition of material received ,and amount of material received; provides evidence regarding the receipt of materials by the entity
search for unrecorded liabilities	A substantive procedure to test the completeness assertion for liability accounts.
substantive test of transctions	The tests of a sample of transactions during the period for monetary errors
vendor's invoice	A bill sent from the vendor to the entity purchasing hte goods or services
voucher/voucher's package	A document used as a source for recording payables. It shows approvals, accounts, and amounts to be recorded ussually attached tohe supporting purchase order, receiving report, and vendor invoice
W-2	The annual report of gross salaries and wages and the income, Social Secirity, and Medicare taxes withheld.
Which of the following accounts does not appear in the acquisition and expenditure cycle?	Sales Return
For which of the following accounts would the matching concept be the most appropriate?	Cost of Goods Sold
Which of the following would not overstate current period net income?	Failing to record a liability as an expense
A client's purchasing system ends with the recording of a liability and its eventual payments. Which of hte following best describes auditors' primary concern with respect to liabilities resulting from the purchasing system?	Accounts payable are not materially understated.
Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?	The official who signs the check should compare the check with the voucher and should stamp "PAID" on the voucher documents.
Budd, the purchasing agent of Lake Hardware whosalers. Arranged for cash ton delivery basis. Budd was probablly able to accomplish this because of Lake's poor internal control over.	Purchases orders
Which of the following is the best audit procedure for determining the existence of unrecorded liabilities?	Examine a sample of cash disbursements in the period subsequent to year end
Which of the following procedures is least likely to be performed before the balance sheet date?	Search for unrecorded liabiilites.
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	Receiving reports
When verifying beits to the perpetual inventory records of a nomanufacturing company, auditors would hbe most interested in examining a sample of purchase	Invoices
Orderd 84 tbales, only half were received. Which of the following controls would have been least likely to have prevented this erroneous payment?	Personnel tin the furniture company's purchasing department should compre the purchase requisition with the purchase order.
Curtis, a maintenance supervisor, submitted maintenance invoices from a phony repair company and received the checks at a post office box. This should been prevented by.	Refusal by the purchasing department to approve the vendor.
An audit team would most likely examine the detail support for changes to which of the following accounts?	Legal expense
Which of the following accounts would most likely be audited in connection with a related balance sheet account?	Property Tax Exmpense
When auditing account balances of liabilities, auditors are most concerned with management's assertion about	Completeness
In a test of controls, auditors may trace receiving reports to vouchers recorded in the voucher register. This is a test of.	Completeness

Created by: 607483217

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