Analytical procedures and purchasing-2.docx

Analytical procedures and purchasing-2.docx - Undergraduate...

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Undergraduate review quiz—Flowcharting and Analytical Procedures 1. When documenting the understanding of a client’s internal control system, the independent auditor sometimes uses a system flowchart, which can best be described as a A. Pictorial presentation of the flow of instructions in a client’s internal computer system. B. Diagram that clearly indicates an organization’s internal reporting structure. C. Graphic illustration of the flow of operations that is used to replace the auditor’s internal control questionnaire. D. Symbolic representation of a system or series of sequential processes. Answer D 2. There are three things that an auditor is especially interested in seeing on a flowchart. Which of the following is NOT one of these three? A. The departments involved with a particular system. B. The documents created in that system. C. The lines of reporting from the department to the corporate accounting department. D. The relevant control processes and procedures that are performed in the system. Answer C 3. Scenario from a purchasing department: A university does not have a centralized receiving function for departmental purchases of textbooks, supplies, and equipment. Which of the following controls will most effectively prevent payment for goods not received, if performed prior to invoice payment? A. Vendor invoices should be matched with department purchase orders. B. Names and addresses on vendor invoices should be compared to a list of department-authorized vendors. C. Vendor invoices should be approved by a departmental supervisor other than the employee ordering the goods. D. Invoices over a specified amount should be approved by the vice president of finance. Answer C 4. In a purchasing department, assume that your objective is to determine that nonrecurring purchases, initiated by various user organizations, have been properly authorized. If all purchases are made through the purchasing department, to which of the following documents should you vouch the purchases?
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