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.
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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