Reference no: EM131440022
Following are selected questions from an internal control questionnaire relating to a company’s purchasing, receiving, cash disbursements, and recording functions. A YES response to a question would indicate a potential strength of the system and a NO response a potential deficiency.
(a) Are prenumbered purchase orders prepared for all approved purchase requisitions?
(b) Are competitive bids or price quotations obtained from purchased goods and services?
(c) Are price lists maintained for repetitive transactions that do not require competitive bids or price quotations?
(d) Are copies of purchase orders forwarded to the requisitioning department and to Receiving?
(e) Are all goods received, inspected, counted, and compared with copies of purchase orders?
(f) Are voucher packages reviewed before being approved for payment?
(g) Are voucher packages and checks reviewed by check signers before signing checks?
REQUIRED: Assume that inquiries indicate the answer is YES to each of the above questions. For each of the above items, provide one specific test of controls that the auditor can perform in order to provide persuasive evidence that the answer provided is accurate. Be sure that the procedure is detailed enough in language so that it is clear what the auditor must do to execute the procedure.