ADMN 4301H Chapter Notes - Chapter 10: Financial Statement, Audit Risk, Internal Control
30 Mar 2020
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Document Summary
Key issues: purchases are all recorded and not understated, payables that are derived from the purchases are fully recorded as a liability, payroll expenses and the associated deductions and related liabilities are properly recorded as liabilities. Audit objectives: the audit objectives for purchases, payables, and payroll relate to obtaining sufficient appropriate evidence about each significant financial statement assertion for the applicable transactions and balances. Requisitioning and ordering: the requisition and ordering functions should be separate, to reduce the opportunity for fraudulent orders and to improve efficiency through a centralized purchasing department. Purchase orders: purchase orders typically contain, description of goods/services ordered, quantities, price, delivery instructions. Supplier information: copies are distributed to: the supplier, receiving, accounting, and the requisitioner. Receiving the goods: receiving should record the goods received, the quantity received, and inspect the goods for damage. Independent checks should take place periodically on the sequence of receiving reports.
