Homework solutions chapters 13, 14 and 15

Homework solutions chapters 13, 14 and 15 - Chapter 13...

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Chapter 13 MC13.1 x13.37 d. Auditors need to determine whether the cost accounting system assigns costs properly to the inventories. MC13.2 x 13.38 b. The perpetual inventory records probably contain the most reliable record of the quantities actually issued. MC13.3 x 13.39 d. Someone who both hires personnel and has custody of paycheques could create a fictitious employee and also get the paycheque. MC13.4 x 13.40 c. Actual observation--meeting the people--produces the best evidence of the "existence" of the employees. MC13.5 x 13.41 c. Preparation of government reports is the least objectionable of the choices and the reports can be cross-checked to other records. MC13.6 x 13.45 c. A special bank account for unclaimed wages is typical. (A safe deposit box--choice (a)--is about the same. Neither of these choices tell anything about who has access to the safe deposit box or the bank account.) MC13.7 x 13.46 b. Correct. The reconciliation of time charged to jobs and time paid by payroll gives the opportunity to detect lack of agreement between the two sources of labour time information. MC13.8 x 13.47 b. Correct. All the other data (employee numbers, job numbers, reconciliation of hours) can be calculated with computer operations on computer file data. Supervisors' signatures are not "visible" to the computer. (However, some systems may have supervisory access that involves an "approval" implicit in the entry of payroll data.) EP13.2 x 13.49 Control tests related to control objectives Procedure (b) Control Objective (a) Strength (1) Valid work-in-process inventory transactions are recorded and none omitted. Preparation of summary material and labour entries. (2) Valid finished goods inventory transactions are recorded and none omitted. Preparation of summary finished goods inventory entries. (3) Recorded labour and material transactions are valid Independent check on materials and labour used. (4) All material issues are authorized . Issue forms secure and used by authorized personnel. (5) Recorded transactions are valid . Separation of recording from custody of assets. (6a) Material used recorded in proper period . Recording of materials used. (6b) Job accounting complete . Standard control number. (6c) Material used authorized . Material received, custody. (6d) Job cost accounting accurate . Proper material received. (6e) Material release recorded . Proper release of materials. (6f) Authorized issue of material and in proper period . Material release authorized and timely. (7) Inventory recorded in proper period . Timely recording.
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EP13.7 x13.53 ICQ items: control objectives, control tests, possible errors/fraud 1. a. Recorded payroll transactions are valid (no fictitious employees). b.
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This note was uploaded on 04/14/2010 for the course ADM 3349 taught by Professor Church during the Winter '10 term at University of Ottawa.

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Homework solutions chapters 13, 14 and 15 - Chapter 13...

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