Question

PLEASE HELP ME COMPLETE THIS TABLE.

PLEASE TELL ME THE ASSERTION (FROM PCAOB ASSERTIONS), THE CONTROLS WE WOULD NEED, AND THE METHOD WE WOULD USE TO TEST CONTROL.

THANK YOU

10. Internal controls in the expenditure cycle. Review the below process narrative and identify a control to minimize each of the risks in the table. Complete the table. NOTE: This question does not require the use of data. Risk Assertion Control in place (per the narrative) Method used to test control Purchasing agents may receive kickbacks from vendors Chicago could pay the vendor the incorrect amount Not all invoices are entered in to the system. Invalid purchase orders may be processed

Answer 1

Risks Assertion Control in Place Method for Test of Control However to prevent it Controls can be placed involving Checking the whole purchase cycle for trannsactions requirement of Request for falling on and above Materiality Levels set for an NA as this transaction is Quotation and receiving Organization, and determining if vendors are chosen Purchasing Agents may receive outside scope of Financial quotations thereupon for as per best price quotes or technical specification. kickbacks from vendors Statements of an entity comparison And to ensure that only best proposition is chosen Separate Authorities for Through Inspection of documents, to ascertain Chicago could pay the vendor calculating, approving and paying whether designated controls were in action. Ensuring the incorrect amount Accuracy and Classification to vendors single vendor code exists for a vendor. As, both Purchasing Agents and Vendors are not from within the Organistion Invoices generation made a separate function and centralised Serial No. of Invoices should be checked and ensuring Not all invoices are entered Also, serially numbered invoices Invoices generated in the period are not left to be into the system Completeness and Cut Off only generated recorded. Any POs that are not validted by approving authority Existence of Approvals by should be ensured that not further processed and are Invalid Purchase Orders may be Approving Authority designated closed. To ensure that If PO is not validated, it can not processed Occurrence for same. be processed further.