Which of the following control is not usually performed in the vouchers payable department? ✅ [Update]

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Which of the following is a standard internal control over cash disbursements?Who is responsible for auditing all payment vouchers within an accounts payable section?Which of the following controls is most effective in providing assurance that recorded purchases are không lấy phí of material errors?Which of the following is most reliable for verifying the correct balance of accounts payable?

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Which of the following internal control activities is not usually performed in the vouchers payable department?

A. Matching the vendor's invoice with the related receiving report.

B. Approving vouchers for payment by having an authorized employee sign the vouchers.

C. Indicating the asset and expense accounts to be debited.

D. Accounting for unused prenumbered purchase orders and receiving reports.

Correct answer on Becker is D. Can you explain why D is correct answer? Who does D, then?

When I saw this question during my study, I dubbed it a “stupid” question…technical term.

The Purchasing Department maintains and issues all Purchase Orders, so I believe they are responsible for the safeguarding of unused PO's

Vouchers Payable = Accounts Payable = Recording Function

Purchasing Department = Authorizing Function

Treasurer = Custody Function

Audit Chapter 7

The primary audit objective regarding the purchasing of materials by the client is to

Determine the reliability of financial reporting by the purchasing function.

To minimize the risk that agents in the purchasing department will use their positions for personal gain, the organization should

Require competitive bidding.

In a well-designed internal control system, employees in the same department most likely would approve purchase orders, and also

Negotiate terms with vendors.

A university does not have a centralized receiving function for departmental purchases of books, supplies, and equipment. Which of the following controls will most effectively prevent payment for goods not received, if performed prior to invoice payment?

Vendor invoices should be approved by a departmental supervisor other than the employee ordering the goods.

The principal function of a cash budget is to

Implement asset and liability maturity matching.

In a well-designed internal control system, the same employee may be permitted to

Mail signed checks and also cancel supporting documents.

Which of the following internal control activities is not usually performed in the vouchers payable department?

Accounting for unused renumbered purchase orders and receiving reports.

Operating control of the check-signing machine normally should be the responsibility of the

Which of the following questions is inappropriate on an internal control questionnaire concerning purchase transactions?

Are intact cash repots deposited daily in the bank?

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

Your objective is to determine that nonrecurring purchases, initiated by various user organizations, have been properly authorized. If all purchases are made through the purchasing department, to which of the following documents should you vouch purchases

Effective controls relevant to purchasing of raw materials should usually include all of the following except

Obtaining third-pary written quality and quantity reports prior to payment for the raw materials.

Based on observations made during an audit, the auditor should discuss with management the effectiveness of the company's controls that protect against the purchase of

Supplies individually ordered, without considering possible volume discounts.

Effective controls relevant to the efficiency of purchases will result in proper evaluation of the time for ordering merchandise. When making this evaluation, the purchasing company should give primary consideration to

The trade-off between the cost of owning and storing excess merchandise and the risk of loss by not having merchandise on hand.

A receiving department receives copies of purchase orders for use in identifying and recording inventory receipts. The purchase orders list the name of the vendor and the quantities of the material ordered. A possible error that this system could allow is

Overpayment for partial deliveries.

An internal control narrative indicates that an approved voucher is required to support every check request for payment of merchandise. Which of the following procedures provides the greatest assurance that this control is operating effectively?

Select and examine canceled checks and ascertain that the related vouchers are dated no later than the checks.

During the audit of a construction contract, if was discovered that the contractor was being paid for each ton of dirt removed. The control called for payment based on cubic yards removed. Which internal control might have prevented this error?

Comparison of invoices with purchase orders or contracts.

Which of the following questions would not appear in an internal control questionnaire relating to cash payments?

Are pre listings made of all cash receipts?

Propex Corporation uses a voucher register and does not record invoices in a subsidiary ledger. Propex with probably benefit most from the additional coast of maintaining an accounts payable subsidiary ledger if

Partial payments to endorse are continuously made in the ordinary course of business.

The procedure that best discourages the resubmission of vendor invoices after they have been paid is

The cancelation of vouchers by CFO personnel.

Which of the following items in a communication about control deficiencies in internal control over cash receipts and disbursements is least significant?

Checks are signed by one person.

Which of the following questions would an auditor most likely include on an internal control questionnaire for notes payable?

Are direct borrowings on notes payable authorized by the board of directors?

Fraudulent use of corporate credit cards will be minimized by which of the following controls?

Subjecting credit card charges to the same expense controls as those used on regular company expense forms.

Which of the following is a standard control over cash disbursements?

Checks should be sequentially numbered and the numerical sequence should be accounted for by the person preparing bank reconciliations.

A purchasing agent places an order for inventory whenever a requisition is received from the warehouse. the warehouse clerk issues requisitions based on periodic physical counts because no perpetual records are maintained. Numerous duplicate orders have b

Keep an adequate record of open purchase orders and review it before ordering.

Under which of the following circumstances would an auditor be most likely to intensify an audit of a $500 impress petty cash fund?

Reimbursement occurs twice each week.

Which of the following control activities is not usually performed with regard to vouchers payable in the accounting department?

Controlling the mailing of the check and remittance advice.

Which of the following observations made during the preliminary survey of a local department store's disbursement cycle reflects a control strength?

The CFO's office prepares checks for suppliers based on vouchers prepared by the accounts payable department.

In the accounting system of Apogee Company, the quantities coated by the receiving department and entered a terminal are transmitted to the computer, which immediately transmits the amounts back to the terminal for display on the terminal screen. This

Verify that the amount was entered accurately.

A client's program that recorded receiving report information entered directly by the receiving department on vendor shipment receipt included a reasonableness or limit test. Which of the following errors would this test likely detect?

The receiving department clerk entered the quantity of the product received as 0.

Which of the following is usually a benefit of using electronic funds transfer for international cash transactions?

Reduction of the frequency of data entry errors.

Which of the following is usually a benefit of transmitting transactions in an electronic data interchange (EDI) environment?

A compressed business cycle with lower year-end receivables balances.

Which of the following statement is true concerning the security of messages in an electronic data interchange (EDI) system?

Encryption performed by physically secure hardware devices is more secure than encryption performed by software.

Which of the following are essential element of the audit trail in an electronic data interchange (EDI) system?

Network and sender-recipient acknowledgements.

The best approach for minimizing the likelihood of software incompatibilities leading to unintelligible messages is for a company and its customers to

Agree to synchronize their updating of EDI-related software.

The auditor plans to select a sample of transactions to assess the extent that purchase discounts by have been lost by the company. After assessing the risks associated with lost purchase discounts, the auditor was out likely to select a sample from which

An audit of the electronic data interchange (EDI) area of a purchasing department revealed the facts listed below. Which one indicates the need for improved internal control?

Branch office employees may access the service with a single call via modem.

Which of the following statements is correct concerning internal control in an electronic data interchange (EDI) system?

Preventive controls generally are more important the detective controls in EDI systems.

Before sending or receiving EDI messages, a company should

Execute a trading partner agreement with each of its customers and suppliers.

A control that a company can use to deter forged EDI messages is to

Acknowledge all messages initiated externally with confirming messages.

A company using EDI made it a practice to track the functional acknowledgments from trading partners and to issue warning messages if acknowledgments did not occur within a reasonable length of time. What risk was the company attempting to address by this

Transmission of EDI transactions to trading partners may sometimes fail.

In a review of an EDI application using a theirs-party service provider, the auditor should

Electronic data interchange (EDI) offers significant benefits to organizations, but it is not without certain major obstacles. Successful EDI implementation begins with which of the following?

Mapping the work processes and flows that support the organization's goals.

Organizations that move to implement EDI often use value-added networks (VANs). Which of the following would not normally be performed by a VAN?

Provide translations from clients' computer applications to a standard protocol used for EDI communication.

Each Friday afternoon, payroll check are distributed by the shift superintendent. The plant is so large and the turnover is so great that the superintendent does not know many of the workers. Undelivered checks are returned to the payroll clerk, from whom

Require the CFO's office to prepare checks only on the basis of supporting documentation from both the timekeeper and payroll office.

The purpose of segregating the duties of hiring personnel and distributing payroll checks is to segregate the

Authorization of transactions from the custody of related assets.

Which of the following is an operating control over the staffing function?

Making background checks on all new hires.

Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?

Organizational independence in the processing of payroll is achieved by functional segregations that are built into the system. Which one of the following functional segregations is not required for internal control purposes?

Segregation of payroll preparation and maintenance of year-to-date records.

An auditor will ordinarily ascertain whether payroll checks are properly endorsed during the audit of

In the audit of which of the following types of profit-oriented enterprises is the auditor most likely to pace special emphasis on testing the controls over proper classification of payroll transactions?

A manufacturing organization.

Which of the following situations represents an internal control weakness in the payroll department?

Paychecks are distributed by the employees' immediate supervisors.

Which of the following human resources department procedures reduces the risk of payroll fraud and represents an appropriate responsibility for the department?

Authorizing the addition or deletion of employees from the payroll.

Which of the following actives performed by a department supervisor most likely would help i the prevention or detection of a payroll fraud?

Approving a summary of hours each employee worked during the pay period.

A large retail enterprise has established policy that requires the paymaster to deliver all unclaimed payroll checks to the internal audit department the end of each payroll distribution day. This policy was most likely adopted to

Detect any fictitious employee who may ave been placed on payroll.

Effective internal control activit�s over the payroll function may include

Verification of agreement of job time tickets with employee time clock card hours by a timekeeping department employee.

In manufacturing environments, employees are often required to use time cards and job time tickets. Which is the false staten related to the use of these documents?

Payroll should be prepared from job time tickets.

Which of the following controls is most effective in providing reasonable assurance that salary wage, and benefit expenses are incurred only for work performed?

All time cards and reports are reviewed and approved in wiring by immediate line supervisors having no responsibilities for paycheck distribution.

Which of the following internal control activities most likely would prevent direct labor hours from being charged to manufacturing overhead?

Use of time tickets to record actual labor worked on production orders.

Effective control over the cash payroll function would mandate which of the following?

Each employee should be asked to sign a receipt.

What information would the auditor expect to find in the data dictionary that would assist in a payroll application audit?

Programs that access the data.

Matthews Corp. has changed from a system of recording time worked on time clock cards to a computerized payroll system in which employees record time in and out with magnetic cards. the computer system automatically updates all payroll records. Because of

Part of the audit trail is altered.

Which of the following activities most likely would detect whether payroll data were altered during processing?

Using test data to verify the performance of edit routines.

Each of the following is an appropriate control over securities and investments except

Custodian separate from treasury function.

A company operates its own truck fleet. Rising operating costs have caused the company to reassess its internal control. Which one of the following controls may help to lower operating costs?

Each driver has a control card for fuel use the self-service diesel fuel dock.

`An audit of a depository institution discloses the existence of a personal loan to the president of that institution. The loan is both sizable and below market rate. Which of the the following is a cost-effective policy that will help prevent a recurrenc

Loans above a nominal dollar level will not be extended to directors or to executives above a specified organizational level.

Which of the following constitutes the best evidence of the transfer of accountability for incoming material from the receiving department to other departments or activities?

An authorized signature on the prescribed transfer form.

Which of the following internal control activities would an entity most likely use to assist in satisfying the completeness assertion related to long-term investments?

The internal auditor compares the securities in the bank safe-deposit box with recorded investments.

Internal control over inventories is important for all of the following reasons except

Inventories are the most liquid asset.

Which of the following questions is not appropriate for an internal control questionnaire concerning securities?

All of the questions are appropriate.

An internal auditor is reviewing the company's policy regarding investing in financial derivatives. The auditor would normally expect to find ll of the following in the policy except a

Statement requiring board review of each transaction because of the risk involved in such transactions.

When an entity uses a trust company as custodian of its trading securities, the possibility of concealing fraud most likely will be reduced if the

Trust company has no direct contact with the entity employees responsible for maintaining investment accounting records.

What is a possible consequence of an employee' being able to visit the safe-deposit box unaccompanied?

The employee could edge corporate invents as security for a short-term personal bank loan.

Which control is most likely to give the greatest assurance that securities held as investments are safeguarded?

Access to securities requires the signatures and presence of two designated officials.

Which of the following questions is not appropriate for an internal control questionnaire about inventory?

Are payment vouchers approved before payment?

An essential procedural control to ensure the accuracy of the recorded inventory quantities is

Establishing a cutoff for goods received and shipped.

Apex Manufacturing Corporation mass produces eight different products. The controller who is interested in strengthening internal control over the accounting for materials used in production is most likely to implement a

Perpetual inventory system.

An internal auditor is examining inventory control in a merchandising division with annual sales of $3,000,000 and a 40% gross profit rate. Tests show that 2% of the dollar amount of purchases do not get into inventory because of breakage and employee the

No, because the cost of the added controls exceeds the projected savings.

The objectives of internal control for a production cycle are to provide assurance that transactions are properly executed and recorded, and that

Custody of work-in-process and of finished goods is properly maintained.

For several years a client's physical inventory count has been lower than what was shown on the books the time of the count, and downward adjustments of the inventory account have been required. Contributing to the inventory problem could be material w

Purchases returned to vendors.

A company uses an MRP (materials requirement planning) system to control inventory. On object is to minimize raw material inventories while avoiding production shutdowns. One way to achieve this objective using MRP is to

Regularly update the authorized master production schedule.

To determine whether an organization is purchasing excel raw materials, an internal auditor should

Ascertain that production budgets and economic order quantities are integrated and have been used in determining quantities purchased.

A firm's inventory consisted of 1,000 different items, 20 of which accounted for 70% of the dollar value. The most recent regular quarterly manual count revealed an unnecessary 2 years' supply of several of the more expensive items. The control that would

Perpetual inventory of the larger dollar value items in the inventory.

EOQ formulas, ABC analysis, and two-bin systems are commonly used elements of the control cycle for the stores process. These controls primarily relate to what part of the cycle?

Appropriate control over obsolete materials requires that they be

Determined by an approved authority to be unusable for their normal purposes.

Which of the following organizational controls related to the processing of scrap would you recommend?

Segregate the responsibility for processing scrap materials from the operational activities that produce the scrap materials.

Which of the following questions would an auditor least likely include on an internal control questionnaire concerning the initiation and execution of equipment transactions?

Are procedures in place to monitor and properly restrict access to equipment?

Which control is not appropriate for property, plant, and equipment?

Disposal of fully depreciated assets.

Equipment acquisitions that are misclassified as maintenance expense most likely would be detected by an internal control activity that provides for

Investigation of variances within a formal budgeting system.

Which of the following is an internal control weakness related to factory equipment?

All purchases of factory equipment are required to be made by the department in need of the equipment.

One objective of internal control is to record property, plant and equipment (PPE) additions correctly as to account, amount, and period. Which of the following environmental considerations indicates that the risks of material misstatement of these additi

Most construction is performed in-house.

An auditor notes year-to-year increases of over $200,000 for small tool expense a manufacturing facility that has produced the same amount of identical product for the last 3 years. Production inventory is kept in a controlled staging area adjacent to

Move the small tools inventory to the custody of the production inventory staging superintendent and implement the use of a special requisition to issue small tools.

Which of the following internal control actives most likely justifies reducing the assessment of the risks of material misstatement for plant and equipment acquisitions?

Periodic physical inspection of plant and equipment by the internal audit staff.

Which of the following activities is most likely to prevent the improper disposition of equipment?

A segregation of duties between those authorized to dispose of equipment and those authorized to approve removal work orders.

Which of the following controls will most likely allow for a reduction in the scope of the auditor's tests of depreciation expense?

Review and approval of the periodic equipment depreciation entry by a supervisor who does not actively participate in its preparation.