Purchase Acquisitions TBS (chapter 12) 🫠

Reciving department does not accept merchandise unless an approved purchase order is on hand

Ensures that goods received are from approved vendor

The tickler file is used to permit timely payment

ensures that cash discounts can be taken

peridoic reconcilation is made form the couchers in the tckler file with AP

ensures that transactions are properly recorded in the general ledger

the receiving department copy of the purchase order includes the quanity

imporper control

AP looks at cendor invoices with recive amount, the requestion and purchase order

ensures that documentation supports the preperation of a voucher

control signs checks based on the voucher

improper control

Perodic counts of invoentry are independiently reconciled with perpetual records

ensures that records and physical amounts match

Receving department 

accpts goods for apporved purchase, counts, goods, looks at receving report 

General Ledger

maintains the AP ontrol account and other related general ledger acct

AP

assembles the proper doc to support a payment voucher, and disburment and records the accts pay

Purchasing agent

issues purchase orders for required goods

Invenotry control

provides physical control over the goods

Invtory Warehouse

provieds authroization for the purchase of goods and performs an accountability function

Auditor independantly executes procedures that were origonally the entity control

reperformance

Auditor looks at writen info relating to transactions bal, shiping, receving, ownership of inventory

inspection of records or documents

Auditor see the acknolwlagements in writing from third parties, or trans/bal, invneotry warehouse

confirmation

Auditor recomputes certain amounts, multiplication of quanity times price, for inventory amounts

recalculation

Auditor questions client about events, obsolete inventory

inquiry

Auditor examines an item to establish its existence

inspection of tangible assets

audtior watches the performance of some process or procedure, (ex: annual inventory count)

observation

Auditor determined that pledged inv was identified

rights and obligations

Auditor confirmed goods held by client in public ware hluse

existance

the auditor perfomed a test at year end to addure all purchase transactions for the year were inclided in the proper period

cutoff (more specific than completness)

The auditor vouched the transations to record payables to receving documents 

Existence (from transactions to reports) 

the auditor determined the accoutns payable was presented on the balance sheet as a current lability

classification and understandibility

the auditor observed the taking of the physical invenotry

existence

The auditor did analytical prodedure with invenotry bal, purchases, production and sales

existence completness and valuation

Audtior obtained rep form manamgent for $ fin stmt for recorded trans with sales and inventory

Accuracy

the audirot compared recorded inventory costs with replacements costs

Accuracy

Auditor compared total amounts in sub ledger with amount in gen ledger

complteness (going up stream)

Aduit inspected fin stmt to determin whether acct pay were presented as current lib on bal sheet

classificication and understandability

Aduitor determined that debts were stated at the amount necessary to satify obligation

valuation and allocation

Aduitor saw $10000 of acct pay were not vaild laib at the balnce sheet date

existence (vaild, bonified, authoized and confermation always means existence)

Auditor got management rep from nature and purpose of recorded pay

Classification and understandablity

Aduitor searched for unvouched payables

completness

The auditor sent confirmations to vendors

completness