90.2K

Verified Solution

Link Copied!

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal and the cash disbursements journal. The purpose of this substantive audit procedure most likely was to: (a) Determine that purchases were properly recorded. (b) Test whether payments were for goods actually ordered. (c) Identifyunusually large purchases that should be investigated further. (d) Verify that cash disbursements were for goods actually received. 23. Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure? (a) The same person signs checks and stamps vouchers "PAID". (b) Voucher packages are authorized and checks are signed by the same 24. person. Purchase orders are not prepared for services acquired directly under authorization of department heads. Unacceptable goods are not scheduled on receiving reports. (c) (d) 25. What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices? (a) Purchase requisitions and purchases orders. (b) Purchase orders and bid quotes. (c) Purchase requisitions and accounts payable entries. (d) Receiving reports and purchase orders. Failure to record a liability generally results in a(n): (a) Understatement of profit. (b) Overstatement of assets. (c) Overstatement of profit. (d) Understatement of current ratio 26. 27. In auditing accounts payable, an auditor's procedures most likely will focus primarily on management's assertion of (a) Presentation and disclosure. (b) Valuation or allocation. (c) Existence or occurrence. (d) Completeness

Answer & Explanation Solved by verified expert

See Answer