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Purchases AA_Chapter_23 - Chapter 23 Audit of the Purchases...

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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong Chapter 23 Audit of the Purchases and Payments Cycle Overstatement vs. Understatement (Trade receivable) (Trade payable) Activity: Case:1, 2, 5, 6 & 7. Prepare the following entry: Perpetual Inventory Systems Periodic Inventory System ( No up-to-date records of either inventory or cost of goods sold.) On September 5, Worley Co. purchased 100 laser lights for resale for $30 per unit from Electronic City on account.
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong Agenda 1. The Purchases and Payments Cycle 2. Acquisitions and Payments 3. Trade Receivables v.s. Trade Payables 4. Purchases & Trade Payables:Key Internal Control 5. Purchases & Trade Payables: Audit Procedures 6. Cash Payments: Key Internal Controls 7. Cash Payments: Audit Procedures
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1. The Purchases and Payments Cycle Purchases (credit purchases) Trade Payables Cash Payments (cash purchases)
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong Acquisitions - Goods: F.O.B destination - when goods are received F.O.B origin - when goods are shipped
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