Professional Documents
Culture Documents
Tests of Controls
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Learning Objective 1:
Tests of Controls
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Learning Objective 2:
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Learning Objective 3:
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observation
inquiry of the control.
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Learning Objective 4:
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Routine transactions:
Non-routine transactions:
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Common control
policies and
procedures
Tests of controls
Policy of authorisation
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Common control
policies and
procedures
Occurrence Recorded
to specific sales
invoices in posting to
accounts receivable
master file.
Test of controls
Select a sample of
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clerical mistakes;
employee fraud;
misapplied accounting principles, especially around some
revenue recognition issues;
management fraud.
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Learning Objective 5:
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Sub-cycles in expenditures,
payables and disbursements
payroll
property, plant and equipment
inventory
income taxes
selling and administrative expenses
miscellaneous expenses paid from petty cash.
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Purchasing
Receiving
Accounts payable
Cash disbursements function.
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Common controls
Tests of controls
Approval of purchase
Examine evidence of
order
Goods received are
counted, inspected and
compared to purchase
order before acceptance
Comparison of purchase
order, receiving report and
suppliers invoice and
recomputation of
suppliers invoice before
recording liability
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Recorded cash
disbursements are
for goods or
services authorised
and received.
Tests of controls
disbursement transactions
from cash payments journal
and inspect supporting
documentation for indication of
checking, review and approval
Observe and inquire about
cheque preparation and
signing and protection of
unissued cheques
For the sample of cash
disbursement transactions
inspect supporting documents
for cancellation, cheque
number and endorsement
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Potential misstatements in
expenditure cycle
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Learning Objective 6:
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Payroll
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Learning Objective 7:
test data
integrated test facility
controlled processing, reprocessing or parallel processing
review program code and results of job processing.
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Test data
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Advanced CAATs
Snapshot
Audit hooks
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