Management and Organizational Studies 3363A/B Chapter 18: Chapter 18 Auditing Acquisition and Payment Cycle.pdf
22 Apr 2012
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Document Summary
Chapter 18 auditing acquisition and payment cycle takes the longest time to audit. Two classes of transactions: acquisition of goods. Routine purchase decisions are delegated but executives approve long- term contracts. Receiving report- triggers update of inventory. Internal controls- segregation of duties from reveiving to storeroom and storeroom to manufacturing. Acquisition journal- for all types incl. inventory, repairs, supplies . Summary acquisitions report- for a period. Vendor"s invoice- for verifying transactions. Debit memo- if goods are returned, this reduces the balance owed to the vendor. 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. Segregation of duties is important. Vendor master file- sums orders by vendor. Purchase order transaction file- pos are in sequential order. Receiving goods and services- recognize the liability. Recognizing the liability- include only existing company acquisitions. Processing and recording cash disbursements.
