Chapter 18 Auditing Acquisition and Payment Cycle.pdf

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 3363A/B
Professor
Santos
Semester
Winter

Description
Chapter 18 Auditing Acquisition and Payment Cycle takes the longest time to auditnot including the payment to employees payroll or allocations of costs within the organization verification of individual assets or prepayment of capital Balance Sheet Accounts manaufacturing equipment prepaid insurance accrued liabilities Income Statement Accounts large varietyTwo Classes of Transactions 1 Acquisition of GoodsPurchase Orders Vendor Master File sums orders by vendor Purchase Order Transaction File POs are in sequential order Internal Controls limits onthat can be authorized by a certain level of employees Routine purchase decisions are delegated but executives approve longterm contractsReceiving Goods and Services recognize the liability Receiving Report triggers update of inventory Internal Controls segregation of duties from reveiving to storeroom and storeroom to manufacturingRecognizing the Liability include only existing company acquisitions Acquisition Journal for all types incl inventory repairs supplies Summary Acquisitions Report for a period Vendors invoice for verifying transactions Debit Memo if goods are returned this reduces the balance owed to the vendor Voucher contains the documentsVendor Master File Accounts Payable Trial Balance shows debits and credits for each vendor over time Vendors Statement is a list of invoices and payments over a month for verifying balances Internal Controls verify the items received were ordered some systems do recalculation of invoices and automatically matches them to purchase orders Segregation of duties is important Vendor Master File sums orders by vendor Purchase Order Transaction File POs are in sequential order
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