The expense cycle offers employees many opportunities to commit fraud in processing cash purchases and cash disbursements. Buyers usually become easy targets for suppliers who offer large returns if willing to transact more. Analytical procedures are a cost-effective means of identifying accounts in the expense cycle that are misstated. a. Please list some of the analytical procedures the auditor may use for estimate the likelihood of misstatement and explain the significance of the audit? b. Why a trade payable turnover day analysis provides a more precise analysis of debt effort rather than 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 cash disbursements. Buyers usually become
easy targets for suppliers who offer large returns if willing to transact
more. Analytical procedures are a cost-effective means of identifying accounts in the expense cycle that are misstated.
a. Please list some of the analytical procedures the auditor may use for
estimate the likelihood of misstatement and explain the significance of the audit?
b. Why a trade payable turnover day analysis provides a more precise analysis of debt
effort rather than
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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