Week 2 DQs_ - Many companies use the computer to generate purchase orders Who is responsible for authorizing a purchase when the computer generates

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Many companies use the computer to generate purchase orders. Who is responsible for authorizing a purchase when the computer generates the purchase order? How does the responsible individual ensure that computer-generated orders are correct and are generated only for purchases that should be made? Explain how an automated matching process works with the processing and payment of accounts payable. What controls need to be implemented in the automated matching process to ensure that only authorized payments are made for goods and services actually received, and that payments are made at the authorized prices? The purchasing manager has the authority to authorize computer-generated purchase orders. Computer-generated orders should be checked for pricing and that the “reorder level” is reached. Should the price be incorrect or the reorder level is off, this should be noted as an exception and the purchasing manager should do further checking. Once the material is received and acceptable, the vendor’s invoice should be matched with the payment terms and processed into the A/P system. If the invoice is received via electronic data interchange (EDI)…then the A/P person should have a system of checks and balances, with the aid of the purchasing manager. Why does the auditor examine travel and entertainment expenses? What would poor controls regarding executive reimbursements say about the tone at the top for purposes of evaluating and reporting on internal control? How might the auditor effectively use analytical procedures in the audit of various expense accounts, such as miscellaneous expenses? Provide an example of how analytical procedures might be used in the audit of such accounts. The main reason that an auditor needs to examine travel and entertainment expenses is that the
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This note was uploaded on 04/07/2011 for the course ACCT 490 taught by Professor Richard during the Spring '11 term at DeVry Long Beach.

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Week 2 DQs_ - Many companies use the computer to generate purchase orders Who is responsible for authorizing a purchase when the computer generates

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