Pkg Acc Infor Systems MS VISIO CD
10th Edition
ISBN: 9781133935940
Author: Ulric J. Gelinas
Publisher: CENGAGE L
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Question
Chapter 10, Problem 5SP
Summary Introduction
Match the control goals or system deficiencies with control plans.
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"In order to determine whether internal control operated effectively to minimize errors of failure to
invoice a shipment, the auditor would select from a sample of transactions from the population
represented by the"
Customer order file.
Bill of lading file.
Subsidiary-ledger
Sales invoice file
Using the following table as a guide, describe for each function
A risk (an event or action that will cause the organization to fail to meet its goals/objectives).
A control/process or use of technology that will address the risk.
Function
Risks
Controls and Technology
Logistics
Purchasing
Receiving
Inventory (Debit
??? (Credit)
SP 12-3
The following is a list of six control plans from this chapter or from Chapters 9, 10, and 11. This is followed be a list of five statements describing either the achievement of a control goal (i.e., a system success) or a system deficiency (i.e., a system failure). Match the five control goals or systems deficiencies with a control plan that would best achieve the desired goal or prevent the system deficiency. Each letter may be used only once, with one letter left over.
Control Plans
File completed and signed receiving report in receiving:
Select vendors who can provide goods with appropriate quality
Approve purchase…
Identify each of the following as relating to (a) the control environment, (b) control procedures, or (c) monitoring:1. Hiring of external auditors to review the adequacy of controls2. Personnel policies3. Safeguarding inventory in a locked warehouse
Chapter 10 Solutions
Pkg Acc Infor Systems MS VISIO CD
Ch. 10 - Prob. 1RQCh. 10 - What are the major functions performed by the OE/S...Ch. 10 - With what internal and external entities does the...Ch. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Distinguish buy-side and sell-side systems.Ch. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 14RQCh. 10 - Describe the impact that entity-level controls...Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Among the three functional entities (marketing,...Ch. 10 - The chapter presented a brief example of how the...Ch. 10 - Prob. 3SPCh. 10 - Prob. 4SPCh. 10 - Prob. 5SPCh. 10 - Prob. 6SPCh. 10 - Prob. 3PCh. 10 - Prob. 4P
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Similar questions
- Client Control Procedures and Audit Tests of Controls. Exhibit 7.64.1 contains an arrangement of examples of transaction errors (lettered a–g) and a set of client control procedures and devices (numbered 1–15).Required:For each client control procedure numbered 1–15, write a test of controls that could produce evidence on the question of whether the client’s control procedure has been implemented and is in operation.arrow_forwardTests of Controls and Errors/Frauds. The following four questions are taken from an internal control questionnaire. For each question, state (a) one test of controls procedure you could use to find out whether the control technique was really functioning and (b) what error or fraud could occur if the question were answered “no” or if you found the control was not effective.1. Are blank sales invoices available only to authorized personnel?2. Are sales invoices prenumbered and are all numbers accounted for?3. Are sales invoices checked for the accuracy of quantities billed? Prices used? Mathematical calculations?4. Are the duties of the accounts receivable bookkeeper separate from all cash functions?5. Are customer accounts regularly balanced with the control account?6. Do customers receive a monthly statement even when the ending balance on the account is zero?arrow_forwardInternal controls do each of the following except: A. Evaluate performance of employees B. Guarantee the accuracy if account records C. Protect assets D. Increase the likelihood that any errors will be caughtarrow_forward
- Internal Control Elements Identify each of the following as relating to the control environment, control procedures, or monitoring: 1. Hiring of external auditors to review the adequacy of controls 2. Personnel policies 3. Safeguarding inventory in a locked warehousearrow_forwardRequired: a. Create a document flowchart of the existing system. b. Analyze the internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in SAS 78. 1.Transaction Authorization 2.Segregation of Duties 3.Supervision 4.Accounting Records 5.Access Control 6.Independent Verificationarrow_forwardIdentify Computer Control Weaknesses. Ajax Inc., an audit client, recently installed anew accounting information system to process its shipping, billing, and accounts receivable records more efficiently. During interim work, an assistant completed the review of theaccounting information system and the internal controls. The assistant determined the following information concerning the new accounting information system and the processingand control of shipping notices and customer invoices.Each major computerized function (i.e., shipping, billing, accounts receivable) is permanently assigned to a specific computer operator who is responsible for making program changes,running the program, and reconciling the computer log. Responsibility for custody and controlover the various databases and system documentation is randomly rotated among the computer operators on a monthly basis to prevent any one person from access to the database anddocumentation. Each computer programmer and computer…arrow_forward
- In a test of controls, auditors may trace receiving reports to vouchers recorded in the voucher register. This is a test fora. Occurrence.b. Completeness.c. Classification.d. Cutoff.arrow_forwardIdentify risks for potential fraud, stealing, or information exposure by reviewing the general ledger/journal numbers. Consider the following in your response: Determine whether established security procedures are being followed. Examine roles and access to data. Determine if approval paths meet the level of security for the task. Receiving Procedures Goods are delivered directly to the requesting office. The requestor receives the goods and packing slip. After the goods or services have been received the packing slip should be signed indicating receipt of goods and scanned and emailed to accounts payable. Approval Paths: Transactions Involving Purchase Orders Accounts payable receives the appropriate documentation from the pertinent department indicating goods and services have been received. A three-way match of the purchase order, invoice, and receiving document is performed and approved by accounts payable. Once approved by accounts payable, a payment voucher is created in…arrow_forwardhas hired you to review its sales order procedures for internal control compliance and to make recommendations for changes. You are required to:a. Create a data flow diagram of the current system. b. Create a system flowchart of the existing system. c. Analyze the internal control weaknesses in the system. ; andd. Prepare a system flowchart of a redesigned computer-based systemarrow_forward
- Which of the following best represents a key control for ensuring sales are properlyauthorized when assessing control risks for sales? A. The separation of duties between the billing department and the cash receipts approval department. B. The use of an approved price list to determine unit selling price. C. Copies of approved sales orders sent to shipping, billing, and accounting departments. D. Sales orders are sent to the credit department for approval.arrow_forwardPayable ICQ Items: Assertions, Tests of Controls, and Possible Errors or Frauds. Following is a selection of items from internal control questionnaires.1. Are purchase orders above a certain level approved by an officer?2. Are the quantity and quality of goods received determined at the time of receipt by receiving personnel independent of the purchasing department?3. Are vendors’ invoices matched against purchase orders and receiving reports before a liability is recorded?4. Are journal entries authorized at appropriate levels?Required:For each preceding item:a. Identify the management assertion to which it applies.b. Specify one test of controls auditors could use to determine whether the control was operating effectively.c. Give an example of an error or fraud that could occur if the control were absent or ineffective.d. Write a substantive procedure that could find errors or frauds that could result from the absence or ineffectiveness of the control items.arrow_forwardAn auditor would be most likely to assess control risk at the maximum level in an electronic environment with automated system-generated information when:Select one: a. Fixed asset transactions are few in number, but large in dollar amount. b. Payables are based on many transactions and large in dollar amount. c. Accounts receivable records are based on many transactions and are large in dollar amount. d. Sales orders are initiated using predetermined, automated decision rules.arrow_forward
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