Class Notes (811,170)
United States (314,506)
Accounting (78)
ACCT 497 (21)
Lee Suman (21)
Lecture 21

ACCT 497 Lecture 21: ACCT 497 Day 21

4 Pages
Unlock Document

Iowa State University
ACCT 497
Lee Suman

ACCT 497 Day 21 • Group project o 3 to 5 pages o Case in Case book o Answer questions after the case o 35 points o Submit case paper on blackboard Chapter 8: Acquisition and Expenditure Cycle • CPS Case o Made fraudulent vendors, but went to the same address o Lined up 9 former classmates and students to pose as CPS vendors o Incentive: Wanted the cash o Opportunity: ▪ Watchdog office was under-staffed and under-funded ▪ He was technology coordinator o Recommendation ▪ Verify address is an actual business ▪ Send confirmation to business • Inherent Risks o Unrecorded liabilities ▪ Completeness is checked more than existence or occurrence o Non-cancelable purchase agreements ▪ Recognize losses o Capitalizing expenses • Acquisition and Expenditure Cycle o • Acquisition and Expenditure Cycle: Typical Activities o Purchase Goods and Services ▪ Department requesting purchase of item(s) prepares a purchase requisition ▪ Bidding may be required on high dollar purchases ▪ Purchasing prepares a purchase order (approved) by the appropriate person (usually dependent on dollar amount of PO) ▪ May be done electronically by EDI o Receiving the Goods or Services ▪ After vendor approval, goods are received by company and evidenced by preparing a (receiving report) o Recording the Asset or Expense and Related Liability ▪ Vendor bills company for goods using a vendor’s (invoice) o Paying the invoice through the cash disbursement process • Audit Evidence in Management Reports and Data Files o Open purchase orders ▪ Check to see if this is still open o Unmatched receiving reports o Unmatched vendor invoices o Accounts (vouchers) payable trial balance o Purchases journal o Fixed asset reports • Control Procedures o Information processing controls ▪ Compare PO number on BOL with company PO ▪ Compare (quantities) against receiving report and purchase order ▪ Compare (prices) against quoted price or catalog listing ▪ Recompute vendor's invoices ▪ Determine when to pay invoice ▪ Properly prepare voucher o Separation of duties ▪ (Authorization) of the purchase is done by the purchasing
More Less

Related notes for ACCT 497

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.