Question

Potential Misstatement Possible Test of Operating Effectiveness Good may be requisitioned for unauthorized purposes Inspect signed...

Potential Misstatement Possible Test of Operating Effectiveness
Good may be requisitioned for unauthorized purposes Inspect signed inventory receipts
Purchases may be made for unauthorized purposes examine supporting documentation for invoices
Goods received may not be ordered Examine receiving report for matching purchase order
Store clerks may deny taking custody of purchased goods examine purchase orders for approved requisitions
Invoices may be recorded for goods not ordered examine evidence of independent check or re-perform independent check
Invoices may be recorded incorrectly or not recorded Enquire about procedures

With regards to control risk assessment for purchase transactions, align the potential misstatements in the following chart with their possible tests of operating effectiveness.

Homework Answers

Answer #1
Potential Misstatement Possible Test of Operating Effectiveness
Good may be requisitioned for unauthorized purposes Enquire about procedures
Purchases may be made for unauthorized purposes examine purchase orders for approved requisitions
Goods received may not be ordered Examine receiving report for matching purchase order
Store clerks may deny taking custody of purchased goods Inspect signed inventory receipts
Invoices may be recorded for goods not ordered examine supporting documentation for invoices
Invoices may be recorded incorrectly or not recorded examine evidence of independent check or re-perform independent check

the potential misstatements have been aligned with their possible tests of operating effectiveness.

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