TUGAS AUDIT 6 JANUARI 2018

8.28 (Objectives 8-2, 8-3, 8-4, 8-5) The following are various activities an auditor does during
audit planning.
1. Decide whether to accept a new client or continue serving an existing one.
2. Identify why the client wants or needs an audit.
3. Obtain an understanding with the client about the terms of the engagement in order to avoid
misunderstandings.
4. Identify whether any specialist are required for the engagement.
5. Compares client ratios to industry or competitor benchmarks to provide an indication of the
company’s performance.
6. Tour the client’s plant and offices.
7. Specify the materiality levels to be used in testing of accounts receivable.
8. Compare key ratios for the company to those for industry competitors.
9. Develop an overall strategy for the audit, including engagement staffing and any required audit
specialists.
10. Prepare common-size financial statements for one or more years that display all items as a
percent of a common base, such as sales.
Required:
For each audit procedure, indicate which of the first four parts of audit planning the procedure
primarily relates to: (1) accept client and perform initial audit planning; (2) understand the client’s
business and industry; (3) perform preliminary analytical procedures; (4) set preliminary judgment
about materiality and performance materiality.
Answer:
Audit Activities Related Planning Procedure
1. Decide whether to accept a new client or (1) Accept client and perform initial audit
continue serving an existing one. planning (lihat E-book halaman 211)
2. Identify why the client wants or needs an (1) Accept client and perform initial audit
audit. planning (lihat E-book halaman 211)
3. Obtain an understanding with the client about (1) Accept client and perform initial audit
the terms of the engagement in order to avoid planning (lihat E-book halaman 211)
misunderstandings.
4. Identify whether any specialist are required (1) Accept client and perform initial audit
for the engagement. planning
5. Compares client ratios to industry or (3) Perform preliminary analytical procedures
competitor benchmarks to provide an (lihat E-book halaman 222)
indication of the company’s performance.
6. Tour the client’s plant and offices. (2) Understand the client’s business and industry
7. Specify the materiality levels to be used in (4) set preliminary judgement about materiality
testing of accounts receivable. and performance materiality (E-book hal 254)
8. Compare key ratios for the company to those (3) Perform preliminary analytical procedures
for industry competitors.
9. Develop an overall strategy for the audit, (1) Accept client and perform initial audit
including engagement staffing and any planning (lihat E-book hal 215, 223)
required audit specialists.
10. Prepare common-size financial statements for (3) Perform preliminary analytical procedures
one or more years that display all items as a (lihat E-book hal 228)
percent of a common base, such as sales.
-Based on Solution Manual-
Question:
The following are various activities an auditor does during audit planning.
1. Send an engagement letter to the client.
2. Tour the client’s plant and offices.
3. Compare key ratios for the company to industry competitors.
4. Review management’s risk management controls and procedures.
5. Review accounting principles unique to the client’s industry.
6. Determine the likely users of the financial statements.
7. Identify potential related parties that may require disclosure.
8. Identify whether any specialists are required for the engagement.

Required:
For each procedure, indicate which of the first four parts of audit planning the procedure
primarily relates to: (1) accept client and perform initial audit planning; (2) understand the
client’s business and industry; (3) assess client business risk; (4) perform preliminary
analytical procedures.

-Pertanyaan dan Jawaban sama persis-

8.29 (Objective 8-3) For the audit of ABC Outing Provision Company’s financial statements, the
following transactions are disclosed if they are material:
1. ABC Outing’s operating lease for its main store is with Perth Properties, which is a real estate
investment company owned by John Peter. Mr. John is a member of ABC Outing’s board of directors.
2. One of ABC Outing’s main suppliers for kayaks is Marry Boating Company. ABC Outing has
purchased kayaks and canoes from Marry for the last 25 years under a long-term contract
arrangement.
3. Short-term financing lines of credit are provided by Commonwealth Bank. Alice Tom is the
lending officer assigned to the ABC Outing account. Alice is the wife of the largest investor of ABC
Outing.
4. Michael Travel partners with ABC Outing to provide hiking and rafting adventure vacations. The
owner of Michael Travel lives in the same neighborhood as the CEO of ABC Outing. They are
acquaintances, but not close friends.
5. The board of directors consists of several individuals who own stock in ABC Outing. At a recent
board meeting, the board approved its annual dividend payable to shareholders effective June 1st.

Required:
a. Define what constitutes a “related party.”
b. Which of the preceding transactions would most likely be considered to be a related party
transaction?
c. What disclosure are required when related party transactions or balances are material?
d. What procedures might auditors consider to help them identify potential related party
transactions for clients like ABC Outing?

Answer:
a. A related party transaction occurs when one party to a transaction has the ability to impose
contract terms that would not have occurred if the parties had been unrelated. Accounting
standards conclude that related parties consist of all affiliates of an enterprise, including (1) its
management and their immediate families, (2) its principal owners and their immediate families,
(3) investments accounted for by the equity method, (4) beneficial employee trusts that are
managed by the management of the enterprise, and (5) any party that may, or does, deal with
the enterprise and has ownership, control, or significant influence over the management or
operating policies of another party to the extent that an arm’s-length transaction may not be
achieved.

b. (1) Related party transaction. ABC Outing has entered into an operating lease with a company
owned by one of the directors on ABC’s board. Because the board has control and significant
influence over management of ABC, the lease transaction may not be at arm’s length.
(2) Not a related party transaction. The fact that ABC Outing has purchased inventory items for
many years from Marry Boating Company is a normal business transaction between two
independent parties. Neither party has an ownership interest in the other party, and neither
has an ability to exercise control or significance influence over the other.
(3) Related party transaction. The financing provided by Commonwealth Bank through the
assistance of Alice may not be at arm’s length given Alice’s husband has control and
significant influence over ABC Outing and may have be able to influence the transaction
through his wife’s employment at the bank or through his influence over ABC’s
management.
(4) Not a related party transaction. Just because the two owners are neighbors does not mean
that either has significant influence or control over the other. Mere acquaintance does not
suggest the transactions would not be at arm’s length.
(5) Not a related party transaction. The declaration and approval of dividends payable to
shareholders is a normal board function.

c. When related party transactions or balances are material, the following disclosures are required:
1. The nature of the relationship or relationships.
 2. A description of the transaction for the period reported on, including amounts if any, and such
other information deemed necessary to obtain an understanding of the effect on the financial
statements.
3. The dollar volume of transactions and the effects of any change in the method of establishing
terms from those used in the preceding period.
4. Amounts due from or to related parties, and if not otherwise apparent, the terms and manner
of settlement.

d. Auditors can determine the existence of material transactions with related parties by
performing the following procedures:
1. Obtain background information about the client in the manner discussed in this chapter to
enhance understanding of the client’s industry and business; i.e., examine corporate charter
bylaws, minutes of board meetings, material contracts, etc.
2. Perform analytical procedures of the nature discussed in Chapters 7 and 8 to evaluate the
possibility of business failure and assess areas where fraudulent financial reporting is likely.
3. Review and understand the client’s legal obligations in the manner discussed in this chapter
to become familiar with the legal environment in which the client operates.
4. Review the information available in the audit files, such as permanent files, audit programs,
and the preceding year’s audit documentation for the existence of material non-arm’slength
transactions. Also discuss with tax and management personnel assigned to the client their
knowledge of management involvement in material transactions.
5. Discuss the possibility of fraudulent financial reporting with company counsel after obtaining
permission to do so from management.
6. When more than one CPA firm is involved in the audit, exchange information with them
about the nature of material transactions and the possibility of fraudulent financial
reporting.
7. Investigate whether material transactions occur close to year-end.
8. In all material transactions, evaluate whether the parties are economically independent and
have negotiated the transaction on an arm’s-length basis, and whether each transaction was
transacted for a valid business purpose.
9. Whenever there are material non-arm’s-length transactions, each one should be evaluated
to determine its nature and the possibility of its being recorded at the improper amount.
The evaluation should consider whether the transaction was transacted for a valid business
purpose, was not unduly complex, and was presented in conformity with its substance.
10. When management is indebted to the company in a material amount, evaluate whether
management has the financial ability to settle the obligation. If collateral for the obligation
exists, evaluate its acceptability and value.
11. Inspect entries in public records concerning the proper recording of real property
transactions and personal property liens.
12. Make inquiries with related parties to determine the possibility of inconsistencies between
the client’s and related parties’ understanding and recording of transactions that took place
between them.
13. Inspect the records of the related party to a material transaction that is recorded by the
client in a questionable manner.
14. When an independent party, such as an attorney or bank, is significantly involved in a
material transaction, ascertain from them their understanding of the nature and purpose of
the transaction.

-Pertanyaan dan Jawaban sama persis-

9-33 (Objectives 9-5, 9-8) Following are six situations that involve the audit risk model as it is used
for planning audit evidence requirements in the audit of inventory.

Situation
Risk 1 2 3 4 5 6
Acceptable audit risk High High Low Low High Medium
Inherent risk Low High High Low Medium Medium
Control risk Low Low High High Medium Medium
Planned detection risk
Planned evidence

Required:
a. Explain what low, medium, and high mean for each of the four risks and planned evidence.
b. Fill in the blanks for planned detection risk and planned evidence using the terms low, medium,
or high.
c. Using your knowledge of the relationships among the foregoing factors, state the effect on
planned evidence (increase or decrease) of changing each of the following five factors, while the
other three remain constant:
(1) A decrease in acceptable audit risk
(2) A decrease in control risk
(3) A decrease in planned detection risk
(4) A decrease in inherent risk
(5) A decrease in inherent risk and an increase in control risk of the same amount

Answer:

a. Low, medium, and high for the four risks and planned evidence have meaning only in comparison
to each other. For example, an acceptable audit risk that is high means the auditor is willing to
accept more risk than in a situation where there is medium risk without specifying the precise
percentage of risk. The same is true for the other three risk factors and planned evidence.

b.
1 2 3 4 5 6
Acceptable Audit Risk H H L L H M
IR x CR L M H M M M
PDR = AAR / (IR x CR) H M L L M M
Planned Evidence L M H H M M

L = low, M= medium, H= high

C.
EFFECT ON PDR EFFECT ON EVIDENCE
(1) Decrease Increase
(2) Increase Decrease
(3) N/A Increase
(4) Increase Decrease
(5) No effect No effect

9-35 (Objectives 9-5) Below are ten independent risk factors:

1. The degree to which external users rely on the statements.
2. The client fails to detect employee theft of inventory from the warehouse because there are no
restrictions on warehouse access and the client does not reconcile inventory on hand to recorded
amounts on a timely basis.
3. The likelihood that a client will have financial difficulties after the audit report is issued.
4. Judgment Required to Correctly-Record Account Balance and Transactions.
5. The assigned staff on the audit engagement lacks necessary skills to identify actual errors in an
account balance when examining audit evidence accumulated.
6. The auditor’s evaluation of management’s integrity.
7. The individual items making up the total population also effect the auditor’s expectation of
material misstatement.
8. Fire losses, major property acquisitions, purchase of complex investments, and restructuring
changes resulting from discontinued operations.
9. The audit program omits several necessary audit procedures.
10.The client fails to reconcile bank accounts to recorded cash balances.

Required:
Identify which of the following audit risk model components relates most directly to each of the ten
risk factors:
• Acceptable audit risk
• Inherent risk
• Control risk
• Planned detection

risk Answer:

Risk Factor Related Audit Risk Model Component

1 Acceptabe audit risk (lihat E-book hal 264)
2 Control risk
3 Acceptabe audit risk (lihat E-book hal 264)
4 Inherent risk (lihat E-book hal 267)
5 Planned detection risk
6 Acceptabe audit risk (lihat E-book hal 265)
7 Inherent risk (lihat E-book hal 267)
8 Inherent risk (lihat E-book hal 267)
9 Planned detection risk
10 Control risk

-Based on Solution Manual-

Question:
Below are ten independent risk factors:
1. The client lacks sufficient working capital to continue operations.
2.The client fails to detect employee theft of inventory from the warehouse because there are
no restrictions on warehouse access and the client does not reconcile inventory on hand to
recorded amounts on a timely basis.
3.The company is publicly traded.
4.The auditor has identified numerous material misstatements during prior year audit engagements.
5.The assigned staff on the audit engagement lack the necessary skills to identify actua l errors in
an account balance when examining audit evidence accumulated.
6.The client is one of the industry’s largest based on its size and market share.
7.The client engages in several material transactions with entities owned by family members
of several of the client’s senior executives.
8.The allowance for doubtful accounts is based on significant assumptions made by management.
9.The audit plan omits several necessary audit procedures.
10. The client fails to reconcile bank accounts to recorded cash balances.

Required:
Identify which of the following audit risk model components relates most directly to each of the ten
risk factors:
• Acceptable audit risk
• Inherent risk
• Control risk
• Planned detection

risk Answer:

Risk Factor Related Audit Risk Model Component

1 Acceptable audit risk
2 Control risk
3 Acceptable audit risk
4 Inherent risk
5 Planned detection risk
6 Acceptable audit risk
7 Inherent risk
8 Inherent risk
9 Planned detection risk
10 Control risk

11.23 (OBJECTIVES 11-3,11-3) The following are internal controls related to various cycles.
1. Sales invoices are matched with shipping documents by the computer system and an exception
report is generated.
2. Receiving reports are prenumbered and accounted for on a daily basis.
3. Sales invoices are independently verified before being sent to customers.
4. Payments by check are received in the mail by the receptionist, who lists the checks and
restrictively endorses them.
5. Labor hours for payroll are reviewed for reasonableness by the computer system.
6. Checks are signed by the company president, who compares the checks with the underlying
supporting documents.
7. Unmatched shipping documents are accounted for on a daily basis.
8. The computer system verifies that all payroll payments have a valid employee identification
number assigned by the human resource department at the time of hiring.
9. The accounts receivable master file is reconciled to the general ledger on a monthly basis.

Required:
a. For each internal control, identify the type(s) of specific control activity (or activities) to which it
applies (such as proper authorization and adequate documents and record(s).
b. For each internal control, identify the transaction-related management assertion(s) to which it
applies.

Answer:
Konsep jawaban a (hal 298)  1. Adequate separation of duties
2. Proper authorization of transaction and activities
3. Adequate documents and records
4. Physical control over assets and records
5. Independent checks on performance
1. a.
b.
2. a.
b.
3. a.
b.
4. a. Proper authorization of transactions and activities
b.
5. a.
b.
6. a. Proper authorization of transactions and activities
b.
7. a.
b.
8. a.
b.
9. a.
b.

-Based on Solution Manual-

Question:
Each of the following internal controls has been taken from a standard internal control questionnaire
used by a CPA firm for assessing control risk in the payroll and personnel cycle.
1. Approval of department head or foreman on time cards is required before preparing payroll.
2. All prenumbered time cards are accounted for before beginning data entry for preparation of
checks.
3. The computer calculates gross and net pay based on hours inputted and information in
employee master files, and payroll accounting personnel double-check the mathematical
accuracy on a test basis.
4. All voided and spoiled payroll checks are properly mutilated and retained.
5. Human resources policies require an investigation of an employment application from new
employees. Investigation includes checking the employee’s background, former employers, and
references.
6. The payroll accounting software application will not accept data input for an employee number
not contained in the employee master file.
7. Persons preparing the payroll do not perform other payroll duties (timekeeping, distribution of
checks) or have access to payroll data master files or cash.
8. Written termination notices, with properly documented reasons for termination, and approval
of an appropriate official are required.
9. All checks not distributed to employees are returned to the treasurer for safekeeping.
10. Online ability to add employees or change pay rates to the payroll master file is restricted via
passwords to authorized human resource personnel.
Required:
a. For each internal control, identify the type(s) of specific control activity (activities) to which it
applies (such as adequate documents and records or physical control over assets and records).
b. For each internal control, identify the transaction-related audit objective(s) to which it applies.
c. For each internal control, identify a specific misstatement that is likely to be prevented if the
control exists and is effective.
d. For each control, list a specific misstatement that could result from the absence of the control.
e. For each control, identify one audit test that the auditor could use to uncover misstatements
resulting from the absence of the control.

Answer:
1. a. Adequate segregation of duties and proper authorization of transactions and activities.
b. Recorded transactions exist.
c. An unauthorized or invalid time card turned in by an existing employee. The time card may
be for an employee who formerly worked for the company or one who is temporarily laid off.
d. An employee could be claiming too many hours by having a friend punch him or her in early,
or by making manual changes on time cards.
e. Check to see that all employees that are punched in one day are physically present.
2. a. Adequate documents and records.
b. Existing transactions are recorded.
c. A missing time card number never could be identified before preparation of payroll starts.
d. An employee would not be paid for a time period. (The employee is almost certain to bring
this to management's attention.) The primary benefit of the control would be to prevent
misstatements for a short period of time and to prevent employee dissatisfaction from
failure to pay them.
e. Obtain a list of company employees and make sure that each one has received a paycheck
for the time period in question.
3. a. Independent check on performance.
b. Recorded transactions are stated at the correct amounts.
c. Mechanical errors of adding up the number of hours, calculating the gross payroll incorrectly,
or calculating withholding incorrectly.
d. Payroll checks incorrectly calculated could be paid to employees.
e. Recheck the amounts for gross payroll, withholding and net payroll.
4. a. Adequate documents and records.
b. Existing transactions are recorded.
c. Preparation of a check for an inappropriate person, the distribution of that check to that
person, and the recording of that check in the cash disbursements journal as a voided check.
d. An employee who is supposed to void a check could record it as voided on the books and
cash the check. At month-end the amount of the check could be covered by adjusting the
bank reconciliation.
e. Test month-end bank reconciliations in detail to determine that the account reconciles
properly, that all supporting documents are proper, looking especially for a check that
cleared and was supposed to be voided, and that no alterations have been made to the bank
statement.
5. a. Proper authorization of transactions and activities.
b. Recorded transactions exist and recorded transactions are stated at the correct amounts.
c. Both errors and fraud are likely to be prevented if competent trustworthy employees are
hired. Hiring honest employees minimizes a likelihood of fraud. Hiring competent employees
minimizes the likelihood of unintentional errors.
 d. Several types of intentional misstatements could occur if a dishonest person is hired.
Similarly, several types of unintentional errors could occur if an incompetent person is hired.
e. An examination of cancelled checks and supporting documents, including time cards and
personnel records, is a test of the possibility of fraud. A test of the calculation of payroll is a
test for an unintentional error caused by employees who are not competent.
6. a. Proper authorization of transactions and activities.
b. Recorded transactions exist.
c. A paycheck cannot be processed for an invalid employee number.
d. A fictitious payroll check could be processed for a fictitious employee if invalid employee
numbers are included in the employee master file.
e. Include test data transactions with invalid employee numbers in the data to be inputted into
the payroll accounting system and determine that all invalid transactions are automatically
rejected by the software application.
7. a. Adequate separation of duties.
b. Recorded transactions exist.
c. A fictitious payroll check that is originated by the person both preparing the payroll checks
and distributing the payroll checks.
d. If one person kept a record of time, prepared the payroll, and distributed the checks, that
person could add a nonexistent employee to the payroll, process the information for the
employee and deposit the paycheck in his or her own bank account without detection.
e. Perform a surprise payoff in which the auditor accounts for all paychecks and distributes
them to the employees, who must provide identification in order to receive their checks.
8. a. Proper authorization of transactions and activities, and adequate documents and records.
b. Recorded transactions exist.
c. The preparation of an inappropriate payroll check for a former employee is prevented.
d. A terminated employee could be continued on the payroll with someone else obtaining the
paycheck.
e. Perform a surprise payoff in which the auditor accounts for all paychecks and distributes
them to the employees, who must provide identification to receive their checks.
9. a. Physical control over assets and records, and adequate segregation of duties.
b. Recorded transactions exist.
c. Checks prepared for nonexistent employees or employees on vacation, or absent for other
reasons are controlled and safeguarded.
d. Checks could be lost which are intended for absent employees or a check could be taken by
the person responsible for distributing the checks.
e. Examine cancelled checks to make certain that each check is properly endorsed, supported
by a time card, and the person for whom the check is made out is still working for the
company.
10. a. Proper authorization of transactions and activities and adequate separation of duties.
b. Recorded transactions exist and recorded transactions are stated at the correct amounts.
c. Preparation of a check for a fictitious employee or preparation of checks using an
unapproved pay rate are prevented.
d. A fictitious payroll check could be processed for a fictitious employee if those with record
keeping responsibilities are allowed to enter new employee numbers into the master file.
Also, paychecks to valid employees could be overstated if unauthorized personnel have the
ability to make changes to the pay rates in the master files.
e. Attempt to access the on-line payroll master file using a password that is not allowed access
to that master file.
11.24 (OBJECTIVES 11-3) The following are misstatements that have occurred in Merry Accessories
Ltd., a trading company selling handbags and accessories:
1. The order clerk placed purchase orders for accessories items; however, it was discovered that
only purchase orders above $3,000 required authorization. The order clerk regularly placed order
for personal goods up to value of $3,000.
2. When goods were received, the warehouse department verified the quantity to the suppliers’
despatch note and checked the quality of the goods received. The warehouse department,
however, did not check against the purchase order as no copy of the purchase order was ever
sent to the warehouse department. It was discovered that three batches of handbags, which the
company did not order, were received and subsequently paidfor.
3. Purchase invoices were input daily by the purchase ledger clerk. No application control was ever
applied over the input process. It was discovered that several mistakes were made during the
input process and suppliers were paid incorrectly.
4. The finance director is only provided with the total amount of payments to be made on the
payment list for payment approval. It was then discovered that some of the payees were
fictitious suppliers.
5. The sales ledger clerk was having a long holiday during Christmas times. Upon return in January,
the clerk entered all the unrecorded sales during his leave as January’s sales for convenience
sake.
6. During the sales ledger clerk’s holiday, one of salespersons, a close friend of the sales ledger clerk,
helped inputting the sales to the accounting system. It was then discovered that two cash sales
transactions marked with “recorded” were not input to the system.
7. When processing orders, the sales clerk entered a discount manually into the invoice. As the sales
clerk was a newly recruited member, it was noted that the employee either forgot to enter the
discount or entered an incorrect level of discount.

Required:
a. For each misstatement, identify one or more types of controls that were absent.
b. For each misstatement, identify the transaction-related management assertions that have not
been met.
c. For each misstatement, suggest a control that may have prevented or detected the misstatement.

Answer:

-Based on Solution Manual-

Question
The following are misstatements that have occurred in
Fresh Foods Grocery Store, a retail and wholesale grocery company:
1. The incorrect price was used on sales invoices for billing shipments to customers because the
wrong price was entered into the computer master file of prices.
2. A vendor invoice was paid even though no merchandise was ever received. The accounts payable
software application does not require the input of a valid receiving report number before
payment can be made.
3. Employees in the receiving department took sides of beef for their personal use. When a
shipment of meat was received, the receiving department filled out a receiving report and
forwarded it to the accounting department for the amount of goods actually received. At that
time, two sides of beef were put in an employee’s pickup truck rather than in the storage freezer.
4. During the physical count of inventory of the retail grocery, one counter wrote down the wrong
description of several products and miscounted the quantity.
5. A salesperson sold an entire carload of lamb at a price below cost because she did not know the
cost of lamb had increased in the past week.
6. A vendor’s invoice was paid twice for the same shipment. The second payment arose because the
vendor sent a duplicate copy of the original 2 weeks after the payment was due.
7. On the last day of the year, a truckload of beef was set aside for shipment but was not shipped.
Because it was still on hand the inventory was counted. The shipping document was dated the
last day of the year, so it was also included as a current-year sale.
8. An accounts payable clerk processed payments to himself by adding a fictitious vendor address to
the approved vendor master file.

Required:
a. For each misstatement, identify one or more types of controls that were absent.
b. For each misstatement, identify the transaction-related audit objectives that have not been met.
c. For each misstatement, suggest a control to correct the deficiency.

Answer:
1. a. Adequate documents and records and independent checks on performance.
b. Transactions are stated at the correct amounts.
c. Changes to the computer master file of prices are reviewed when the master file is updated.
2. a. Proper authorization of transactions and adequate documents and records.
b. Recorded transactions exist.
c. Include a control in the accounts payable software that requires the input of a valid receiving
report number before the software will process a payment on an accounts payable.
3. a. Adequate documents and records, physical control over assets and records, and independent
checks on performance.
b. Recorded transactions exist.
c. 1) Fence in the physical facilities and prohibit employees from parking inside the fencing.
2) Require the accounting department to maintain perpetual inventory records and take
physical counts of actual sides of beef periodically.
4. a. Independent checks on performance.
b. Recorded transactions are stated at the correct amounts.
c. Counts by qualified personnel and independent checks on performance.
5. a. Proper authorization of transactions and activities.
b. Transactions are stated at the correct amounts.
c. 1) Make sure that the salesman has a current price list.
2) Require independent approval of all transactions, including the price, before shipment is
made.
6. a. Adequate documents and records.
b. Recorded transactions exist.
c. (1) Require that payments only be made on original invoices.
(2) Require a receiving report be attached to the vendor's invoice before a payment is made.
7. a. Adequate documents and records, and independent checks on performance.
b. Transactions are recorded on the correct dates.
c. Carefully coordinate the physical count of inventory on the last day of the year with the
recording of sales to make certain counted inventory has not been billed and billed inventory
has not been counted.
8. a. Adequate separation of duties.
b. Recorded transactions exist.
c. Restrict the accounts payable clerk from being able to make changes to the approved vendor
master file. Only allow purchasing personnel to input changes to that master file.