Vendor account reconciliations are performed by three clerks in the accounts payabledepartment on Friday of each week. The accounts payable supervisor reviews thecompleted reconciliations the following Monday to ensure they have been completed.The work performed by the supervisor is an example of which COSO component?(1) Control activities (3) Risk assessment(2) Information and communication (4) Monitoring

Vendor account reconciliations are performed by three clerks in the accounts payabledepartment on Friday of each week. The accounts payable supervisor reviews thecompleted reconciliations the following Monday to ensure they have been completed.The work performed by the supervisor is an example of which COSO component?(1) Control activities (3) Risk assessment(2) Information and communication (4) Monitoring

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter3: Ethics, Fraud, And Internal Control

Section: Chapter Questions

Problem 11P

See similar textbooks

Related questions

Q: of transactions and account balances. Determining the audit strategy occurs during which phase of…

A: Answer : b. Planning stage In planning stage the audit staff collates the background information…

Q: In reviewing the process procedures and internal controls of one of your audit clients, Steeplechase…

A: Internal controls means the control related to internal functions of the system and its procedures.

Q: Internal controls do each of the following except: A. Evaluate performance of employees B.…

A: Internal control is a system designed by the organisation for Accounting and auditing purposes which…

Q: Discuss the internal control weaknesses and risks associated with the above process

A: Financial Reporting System: The financial reporting system (FRS) overview the financial resources…

Q: Match each of the following control activities with its definition. Control Activities…

A: Given below control activities are matched with the definition:

Q: You are an audit supervisor assigned to a new client which is listed on a Stock Exchange. You…

A: After a careful review of the budget for data security enhancement projects, you feel the budget…

Q: Discuss the internal control weaknesses and risks associated with the above process

A: Financial Reporting System: The financial reporting system (FRS) overview the financial resources…

Q: Which control activity is the entity implementing when credit and debt memorandums are prenumbered…

A: Control activities helps in assuring that necessary actions are taken to address risks to the…

Q: Sharon, an audit manager assigned to the audit of Newsome Corporation is observing the client's…

A: The most accurate description of the type of control in question is:a. This type of control is…

Q: Required:Match each of the control procedures listed below with the most closely related control…

A: The control procedures are given as,

Q: Which of the following statements is true?a. Journal vouchers detailing transaction activity flow…

Q: Following are descriptions of 10 internal controls. The company has an organizational chart that…

A: The COSO framework helps the business in the establishment, assessment, and enhancement of the…

Concept explainers

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.

Question

Vendor account reconciliations are performed by three clerks in the accounts payable
department on Friday of each week. The accounts payable supervisor reviews the
completed reconciliations the following Monday to ensure they have been completed.
The work performed by the supervisor is an example of which COSO component?
(1) Control activities (3) Risk assessment
(2) Information and communication (4) Monitoring

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Audit procedures for items of Financial Statement

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Required:Match each of the control procedures listed below with the most closely related control procedurestype. Your answer should pair each of the numbers 1 through 10 with the appropriate letter.Control Procedure Typesa. Adequate documents and recordsb. Checks on recorded amountsc. Clearly defined authority and responsibilityd. Safeguards over assets and recordse. Segregation of dutiesControl Procedures1. Only the cashier assigned to the cash register is allowed to perform transactions.2. Division managers are evaluated annually on the basis of their division’s profitability.3. Invoices received from outside suppliers are filed with purchase orders.4. Employees with access to the accounting records are not permitted to open the mailbecause it contains many payments by check from customers.5. The extent of access to the many segments of the company’s computer system is tightly controlledby individual identification cards and passwords that change at regular intervals.6. Each shipment…
Every month, the accounting manager reconciles the accounts receivable master file to the general ledger. Which management assertions apply to this control?
Following are descriptions of 10 internal controls. The company has an organizational chart that establishes the formal lines of reporting and authorization protocols. Before a cash disbursement can be processed, all payee information must be verified by matching the payee to the company’s approved vendor listing. The company’s computer systems track individual transactions and automatically accumulate transactions to create a trial balance. On a monthly basis, department heads compare a budget to actual performance report and investigate unusual differences. The company must receive university transcripts documenting all college degrees earned before an individual can begin employment with the company. Senior management obtains data about external events that might affect the entity and evaluates the impact of that information on its existing accounting processes. Each quarter, department managers are required to perform a self-assessment of the department’s compliance…
12-12. Draw a document flowchart to depict each of the following situations.a. An individual from the marketing departmentof a wholesale company prepares fivecopies of a sales invoice, and each copy issent to a different department.b. The individual invoices from credit salesmust temporarily be stored until they canbe matched against customer payments ata later date.c. A batch control tape is prepared along witha set of transactions to ensure completenessof the data.d. The source document data found onemployee application forms are used asinput to create new employee records ona computer master file.e. Delinquent credit customers are sent asmany as four different inquiry letters beforetheir accounts are turned over to a collectionagency.f. Physical goods are shipped back to the supplierif they are found to be damaged uponarrival at the receiving warehouse.g. The data found on employee time cards arekeyed onto a hard disk before they are processedby a computer.h. The data found on…
Sharon, an audit manager assigned to the audit of Newsome Corporation is observing the client's revenue-receivables cycle. Sharon observes that the IT system responsible for processing and posting receivable transactions produces a daily exceptions report which is emailed to an accounts receivable clerk responsible for investigating the exceptions. Which of the following most accurately describes the type of control that is responsible for determining possible exceptions and forwarding them on to the accounts receivable clerk? • This type of control is typically referred to as a detective control. These types of controls usually assist the client in detecting items that need further investigation. These controls help to minimize misstatements in the financial statements. • This type of control is typically known as a manual IT control. This name is derived from the fact that although the control allows initial processing by the client's IT system, it is flagged for manual follow up. •…
Patrick Houghton was meeting with his manager to plan audit strategy in order to determine the amount of time to spend testing the client's internal controls and conducting detailed testing of transactions and account balances. Determining the audit strategy occurs during which phase of the audit? a. client acceptance stage b. planning stage c. performing stage d. reporting stage
You are an audit supervisor assigned to a new client which is listed on a Stock Exchange. You visited the corporate headquarters to become acquainted with key personnel and to conduct a preliminary review of the company’s accounting policies, controls, and systems. During this visit, (i) After a careful review of the budget for data security enhancement projects, you feel the budget appears to be adequate. Identify the problems and explain them in relation to the internal environment.
Which of the following statements is true?a. Journal vouchers detailing transaction activity flow from various operational departments into the GLS, where they are independently reconciled and posted to the journal voucher history file. b. Journal vouchers summarizing transaction activity flow from the accounting department into the GLS, where they are independently reconciled and posted to the general ledger accounts. c. Journal vouchers summarizing transaction activity flow from various operational departments into the GLS, where they are independently reconciled and posted to the general ledger accounts. d. Journal vouchers summarizing transaction activity flow from various operational departments into the GLS, where they are indepen dently reconciled and posted to the journal voucher history file.
Match each of the following control activities with its definition. Control Activities Definitions 1. Separation of duties 2. Physical controls 3. Proper authorization 4. Employee management 5. Reconciliations 6. Performance reviews a. The company should maintain security over assets and accounting records.b. Management should periodically determine whether the amounts of physical assets of the company match the accounting records.c. The company should provide employees with appropriate guidance to ensure they have the knowledge necessary to carry out their job duties.d. The actual performance of individuals or processes should be checked against their expected performance.e. Authorizing transactions, recording transactions, and maintaining control of the related assets should be separated among employees.f. To prevent improper use of the company’s resources, only certain employees are allowed to carry out certain business activities.
You are tasked to perform cut-off procedures for expenses and its related payable. In testing the completeness/cut-off assertion, what document would you most likely inspect? A. Vendor invoice register 15 days before and 15 days after report date. B. Cash disbursement journal 15 days before and 15 days after report date. C. Accounts payabie subsidiary ledger. D. Purchase journal 15 days before and 15 days after report date.
Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchaseorders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries.Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At theend of each month, he reconciles the subsidiary accounts to their control accounts in the generalledger to ensure they balance.Discuss the internal control weaknesses and risks associated with the above process
Internal Control Terminology A list of terms and another list of definitions and examples are presented below. Match the directly related definition or example with the each term. Required: Accounting controls Adequate documents and records Checks on recorded amounts Effective personnel policies Company policy requires receiving reports to be made for all deliveries by suppliers. Cash deposits are reconciled with cash register records at the end of every day. These are policies and procedures that govern the identification, measurement, recording, and communication of economic information. Every new employee is required to spend two days in training courses to learn company policies.