Mr Paul has worked in AAA Limited as an accountant for the last two years. He prepares journal vouchers for general ledger entries using the source documents such as purchase orders, sales invoices, and suppliers' invoices. At the end of each working day, he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, Mr Paul reconciles the subsidiary accounts to their control accounts in the general ledger to ensure no difference in these accounts. Required: Is Mr Paul handling any incompatible accounts? Further discuss the internal control weaknesses and risks associated with the above processes of AAA Limited

Mr Paul has worked in AAA Limited as an accountant for the last two years. He prepares journal vouchers for general ledger entries using the source documents such as purchase orders, sales invoices, and suppliers' invoices. At the end of each working day, he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, Mr Paul reconciles the subsidiary accounts to their control accounts in the general ledger to ensure no difference in these accounts. Required: Is Mr Paul handling any incompatible accounts? Further discuss the internal control weaknesses and risks associated with the above processes of AAA Limited

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash And Marketable Securities

Section: Chapter Questions

Problem 60RSCQ

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