The expense cycle offers employees many opportunities to commit fraud in processing cash purchases and disbursements. Buyers are usually easy targets for suppliers who offer large returns if they are willing to transact more. Analytical procedures are a cost-effective tool to identify misstated accounts in the expense cycle. a. Please list some analytical procedures that can be used by the auditor to estimate the possibility of misstatement and explain the significance of the audit. b. Why does a trade payable turnover day analysis provide a more precise analysis of trade payables than the current ratio? c. Why do auditors pay more attention to debt understatement than debt overstatement? d. Please identify the elements of environmental control that are relevant to initiation and recording of purchases?
The expense cycle offers employees many opportunities to commit fraud in processing cash purchases and disbursements. Buyers are usually easy targets for suppliers who offer large returns if they are willing to transact more. Analytical procedures are a cost-effective tool to identify misstated accounts in the expense cycle.
a. Please list some analytical procedures that can be used by the auditor to estimate the possibility of misstatement and explain the significance of the audit.
b. Why does a trade payable turnover day analysis provide a more precise analysis of trade payables than the
c. Why do auditors pay more attention to debt understatement than debt overstatement?
d. Please identify the elements of environmental control that are relevant to initiation and recording of purchases?
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