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Accounting Essay

858 words - 3 pages

AUDIT PROGRAMAccounts Payable
Assertion

Objective

Procedures

Valuation or Allocation

To determine if the amounts recorded for accounts payable have been recorded correctly.

Enter fictitious payables into the system. Process it using the clients system and compare the result with the expected output.
Obtain a listing of accounts payable, foot the listing, and agree it to the general ledger control account.
Trace selected vouchers or vendor accounts to the supporting documents or subsidiary accounts payable records to verify the accuracy of the details.
Obtain copies of vendors' monthly statements and reconcile the amounts to the client's accounts payable records.
Reconcile the daily cash disbursements with posting to the accounts payable subsidiary records.

Completeness

To determine if all transactions affecting accounts payable that should have been recorded are recorded.

Ask management about control activities used to identify unrecorded payables.
Confirm vendor accounts, including accounts with small or zero balances.
Vouch large monetary items from the purchases journal and cash disbursements journal for a limited time after year-end.
Examine the files of unmatched purchase orders, receiving reports, and vendor invoices for any unrecorded payables.
Examine and test the client's procedures for reviewing vendor payments lists.

Cut-off

To determine if all transactions affecting accounts payable have been recorded in the correct accounting period.

Compare the date on receiving report with the date on the vendor's invoice.
Compare the date of the invoice with the date they were recorded in the accounts payable journal.
Tracing dated receiving reports to voucher register entries and vouch recorded entries to supporting documentation.

AUDIT PROGRAMCash
Assertion

Objective

Procedures

Valuation or Allocation

To determine if the amounts recorded for cash have been recorded correctly.

Reconcile the total of electronic cash disbursements transfer and the checks issued each day with the daily cash disbursements report.
Foot the total of the cash disbursements journal and verify if it agrees with the underlying accounting records and the general ledger control account balance.
Perform a bank reconciliation and account for any differences.
Review the reconciliation of payment transfers with postings to the cash disbursements journal and accounts payable subsidiary records.
Enter fictitious disbursements of cash into the system. Click "Pay money to Supplier" button. Enter the details. Process it using the clients system. Go to "Reports" and examine if the dummy transactions are reflected in correct amount.

Completeness

To determine if all disbursements of cash are recorded.

Examine the sequence of checks in the check register.
Ask management about control activities used to identify unrecorded disbursements.
Vouch large monetary items from the purchases journal and cash disbursements journal.
Examine and test the...

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