Control_Testing_Inve - 3 The client does not take cycle counts of the perpetual inventory system However other controls over receipt and shipment

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Session 10 Required: For each of the following tests related to acquisition and inventory, indicate the effect of the deficiency on  the planning of direct tests of the related accounts balances. 1. The client utilizes an automated purchasing system. However, in the tests of controls, the auditor  finds the access to the system is not restricted as authorized. The auditor finds that purchasing  agents routinely override purchase requisitions and also add new vendors without going through  the approval process required by company policies 2. The client does not record returned merchandise
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Unformatted text preview: 3. The client does not take cycle counts of the perpetual inventory system. However, other controls over receipt and shipment of inventory are working 4. The client does not employ a systematic process to evaluate the potential obsolescence in inventory 5. Many of the travel and expense reimbursements to top management are not accompanied by receipts or a description of the purpose of the expenditure. 6. Preliminary analytical procedures of expense accounts indicate that they are low in comparison with (a) previous years and (b) in relationship to sales....
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This note was uploaded on 09/29/2011 for the course ADMS 4551 taught by Professor Iacobelli during the Spring '11 term at York University.

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