审计学英文教学课件：Chapter 14 Acquisition and payment cycle

1、Chapter 14Audit of the Acquisitionand Payment Cycle1Lecturer 陈丹Topic list Accounts in the acquisition and payment cycleRelated documents and records in the acquisition and payment cycleInternal control and tests of controls for acquisitionsInternal control and tests of controls for cash disbursement

2、s2Learning Objective 1Identify the accounts and theclasses of transactions in theacquisition and payment cycle.3Accounts in the Acquisitionand Payment CycleCash in BankPurchase Returnsand AllowancesPurchaseDiscountsCashdisbursementsPurchasereturns andallowancesPurchasediscountsAcquisitionsof goods a

3、ndservicesRaw MaterialPurchasesProperty, Plantand EquipmentAccounts Payable4Learning Objective 2Describe the business functionsand the related documentsand records in the acquisitionand payment cycle.5CheckInvoice ApprovalReceiving ReportInvoicePurchase OrderVoucher System of ControlPurchase Requisi

4、tionVoucherCashiers OfficeAccounting Dept.Receiving Dept.Supplier (Vendor)Purchasing Dept.Requesting Dept.Cashiers OfficeAccounting, Requesting,Purchasing Depts.Accounting Dept.Supplier (Vendor)Purchasing andAccounting Depts.Supplier (Vendor)6Copy 2PurchasingRequestingDepartmentAccountingOne copyof

5、purchaserequisitionused toprepare thevoucher.7Copy 1Copy 3Copy 2Retained in PurchasingAccountingVendorRequesting Dept.89Seller Invoice date PurchaserOrder number Credit termsFreight terms Goods Invoice amount101112Dec 2006 Q2biNumerical sequence of purchase requisitions accounted for?Order informati

6、on checked after transferred onto the purchase order?Identifying the supplier in the best interest of KLE Co.?Purchase order sequentially prenumbered and accounted for?Copies of purchase order adequate?13How to internally verify the order information when the purchase requisition is thrown away?Dama

7、ged goods notes sequentially prenumbered and accounted for?One copy of damaged goods note retained in goods inwards department?Copies of GRN adequate?How to check the completeness of the filing system when GRN is filed in order of the reference number? 14Learning Objective 3Understand internal contr

8、ol anddesign and perform tests ofcontrols for acquisitions.15Control objectiveKey internal controlCommon Test of Control Acquisition transactions are recorded. (completeness)Purchase orders are prenumbered and accounted for. Account for integrity of numerical sequence of purchase orders.Receiving re

9、ports are prenumbered and accounted for.Account for integrity of numerical sequence of receiving reports.Vouchers are prenumbered and accounted for.Account for integrity of numerical sequence of vouchers.Trace from purchase requisitions, purchase orders, receiving reports and vendors invoices in vou

10、cher package to acquisitions journal.Applies to occurrence as well16Control objectiveKey internal controlCommon Test of Control Recorded acquisitions are valid and for goods and services received. (occurrence)Purchase requisition, purchase order, receiving report, and vendors invoice are attached to

11、 the voucher. Trace from acquisitions journal to voucher package. Examine documents in voucher package for existence. Acquisitions are approved for prices and vendors at the proper level. Examine indication of approval.Computer accepts entry of purchases only from authorized vendors in the vendor ma

12、ster file. Attempt to input transactions with valid and invalid vendors.Documents are cancelled to prevent their reuse.Examine indication of cancellation.Vendors invoices, receiving reports, purchase orders, and purchase requisitions are internally verified.Examine indication of internal verificatio

13、n.17Control objectiveKey internal controlCommon Test of Control Acquisitions are accurately recorded. (accuracy)Calculations and amounts on documents are internally verified. Examine indication of internal verification.Batch totals are compared with computer summary reports.Examine file of batch tot

14、als for initials of data control pare totals to summary reports.Accounts payable master file contents are internally verified.Examine indication of internal verification.Accounts payable master files are reconciled with general ledger balances.Examine payable trial balance and observe their preparat

15、ion. Prepare payable trial balance independently.Supplier statements are reconciled to purchase ledger regularly.Discuss with personnel and observe activities. Prepare reconciliations of accounts payable independently.Compare recorded transactions in the acquisitions journal with purchase requisitio

16、ns, purchase orders, receiving reports and vendors invoices.18Control objectiveKey internal controlCommon Test of Control Acquisitions are correctly classified. (classification)An adequate chart of accounts is used. Review chart of accounts for adequacy by reference to vendors invoices.Internal veri

17、fication of journalizing and posting.Examine the indications of internal verification on the affected records.Acquisitions transactions are recorded on the correct dates. (cut-off)Procedures require recording transactions as soon as possible after the goods and services have been received.Examine pr

18、ocedures manual and observe whether vendors invoices are unrecorded promptly.Dates are internally verified.Examine the indications of internal verification on the affected documents and record.Compare dates of receiving reports and vendors invoices with dates in the acquisitions journal.19Learning O

19、bjective 4Understand internal control anddesign and perform tests ofcontrols for disbursements.20Control objectiveKey internal controlCommon Test of Control cash disbursement transactions are recorded. (completeness)Checks are prenumbered and accounted for. Account for integrity of numerical sequenc

20、e of checks. prohibitions over signing of blank checks. examine checks to verify there is no signed blank checks. prompt dispatch of signed checks. obtaining of cancelled checks from bank. payments recorded promptly in cash disbursement journal.Examine procedures manual and observe whether signed ch

21、ecks are unrecorded promptly.The bank reconciliation is prepared monthly by an employee independent of recording cash disbursements or custody of cash.Examine bank reconciliation and observe their preparation.Trace a sample of cash disbursement transactions from cancelled checks to the corresponding

22、 cash disbursement journal entries.Applies to occurrence as well21Control objectiveKey internal controlCommon Test of Control Recorded cash disbursements are for goods and services actually received. (occurrence)There is adequate segregation of duties between accounts payable and custody of signed c

23、hecks.Discuss with personnel and observe activities.Supporting documents are examined before signing of checks and stamped paid after signing of checksDiscuss with personnel and observe activities. Approval of payment at the time checks are signed.Examine indication of approval.Trace a sample of cas

24、h disbursement transactions from acquisitions journal entries to the related cancelled checks and the related acquisition journal entries.22Control objectiveKey internal controlCommon Test of Control Related cash disbursement transactions are accurate. (accuracy)Calculations and amounts are internal

25、ly verified.Examine indication of internal verification.Bank reconciliation is prepared monthly by an employee independent of recording cash disbursements or custody assets.Examine bank reconciliations and observe their preparation. Prepare bank reconciliations independently.Supplier statements are

26、reconciled to purchase ledger regularly.Discuss with personnel and observe activities. Examine reconciliations for a sample of payable accounts.Applies to occurrence and completeness as well23Control objectiveKey internal controlCommon Test of Control Cash disbursement transactions are properly clas

27、sified. (classification)An adequate chart of accounts is used.Examine procedures manual and chart of accounts for adequacy.Supplier statements are reconciled to purchase ledgers regularly.Discuss with personnel and observe activities. Examine reconciliations for a sample of payable accounts.Agreemen

28、t of monthly cash disbursements journal to purchase ledgers.Examine indications of internal verification.Cash disbursement transactions are recorded on the correct dates. (cut-off)Procedures require recording of transactions as soon as possible after the check has been signed.Examine procedures manual and observe whether signed checks are recorded promptly.Dates are internal verified.Examine indications of internal verification.Comp