Professional Documents
Culture Documents
Valuation/ Measurement
Presentation and Disclosure
Purchases Transaction
Existence/ Occurrence
Completeness
Rights and Obligation
Valuation / Measurement
Presentation and Disclosure
Cash Payments Transactions
Existence/ Occurrence
Completeness
Rights and Obligation
Valuation / Measurement
Presentation and Disclosure
Payroll Transactions
Existence/Occurrence
Completeness
Rights and Obligation
Multiple Choices
Potential Misstatement
Audit Procedures
Test of Controls
A purchase requisition,
purchase order, receiving
report, and vendor's invoice
are filed in support of each
acquisition.
Observe procedure or
examine file of documents.
C. Completeness:
Receiving reports are
prenumbered and accounted
for.
Observe procedure.
C. Completeness
Checks are pre numbered and
accounted for.
Independent bank
reconciliation is performed
monthly.
D. Rights and obligations :
Checks signer who is
independent of voucher
preparation examines
supporting documentation
before signing checks.
E. Valuation /
F. Measurement:
Amounts and calculations on
vendors' invoices are
independently verified.
G. Presentation and
disclosure.
Chart of accounts adequately
describes accounts to be used,
and account coding is
assigned by one person and
checked by another.
V. Payroll Transactions
A. Existence /
B. Occurrence:
Personnel department officials
authorize additions of
employees to payroll and
approve changes in status and
changes in pay rates.
Payroll checks are signed and
distributed by a person not in
personnel, payroll accounting,
or supervision of operations
C. Completeness
Payroll checks are
prenumbered and accounted
for in the bank reconciliation
by a person independent of
the payroll function.
not be disclosed.
Observe procedure.
Observe procedure
Multiple Choices
1. The following are possible misstatements in a Purchase Transaction except:
a. Documents may be reused and acquisitions may be recorded twice.
b. Purchases may be unrecorded.
c. Client could overpay for goods or services.
d. Employees may be paid for hours they did not work.
2. What management assertion deals with the use of correct account title to be used in
recording transaction?
a. Rights and obligation
b. Presentation and disclosure
c. Completeness
d. Valuation and measurement
3. The test of controls for this possible misstatement client could overpay goods or
services is :
a. Examine approval signature on authorization for pay rate change.
b. Observe procedure. Examine documents.
c. Examine voucher for signature indicating performance.
d. Observe separation of duties
4. Tests of controls are directed toward the controls:
a. efficiency.
b. effectiveness.
c. efficiency and effectiveness.
d. cost benefit ratio.
5. Which of the following is not appropriate for purposes of testing the effectiveness of controls?
a.
b.
c.
d.
Reference:
Ma. Elenita Balatbat Cabrera, BBA, MBA, CPA, CMA, Public Accountancy Profession
2013-2014 EDITION