Chapter 14 Auditing the Purchasing CycleWord格式.docx
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Chapter 14 Auditing the Purchasing CycleWord格式.docx
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14
AuditingthePurchasingCycle
14.1TypicalTransactionsandControls
(a)AcquisitionofGoodsandServices,
(i)DeterminingNeeds,
(ii)Ordering,
(iii)Receiving,Inspecting,andAcceptingGoods,
(iv)StoringorUsing,
(v)Recording,
(b)PaymentsMadeforGoodsandServices,
(c)GoodsReturnedtoSuppliers,
(d)PayrollProcessing,
(i)AuthorizingEmployment,
(ii)RecordingTimeWorkedorOutputProduced,
(iii)CalculatingGrossPayandDeductions,
(e)PaymentofWages,
(f)MonitoringControls,
14.2DeterminingtheAuditStrategy
(a)DevelopingtheUnderstandingofControls,
(b)AuditStrategyDecisions-AnIllustration,
(c)TestsofControlstoSupportaLowControlRiskAssessment,
Thepurchasingcycleconsistsoftheacquisitionofgoodsandservicesinexchangeforcashorpromisestopaycash.Theauditofaccountsinthepurchasingcycle(e.g.,purchasesofmerchandiseorrawmaterials,variousexpenses,accountspayable,andcash)usuallyconsistsofacombinationofsubstantivetestsandtestsofcontrolstosupportanassessmentofcontrolriskthatisbelowthemaximumoratlow.Rarelywouldtheauditofpurchasingcycleaccountsconsistsolelyofsubstantivetests-inmostentities,expendituresandcashdisbursementsaresufficientlynumerousthatmanagementinstallsthenecessarycontrolsandtheauditorfindsitefficienttotestthemasabasisforrestrictingsubstantivetests.
Thischaptercoverstheprocessbywhichtheauditordeterminesthestrategyforauditingthepurchasingcycle.Itdescribestypicalpurchasesofgoodsandservices,theaccountingsystemforprocessingthem,andthemonitoringandcontrolactivitiesappliedtothetransactions.Italsodiscussestheconditionsunderwhichtheauditorwillbeabletoarriveatapreliminaryassessmentofcontrolriskthatisbelowthemaximumoratlowandthecontrolsthatordinarilyshouldbetestedundervariouscontrolriskassessments.Chapter23describesthenature,timing,andextentofsubstantivetestsofpurchasingcycleaccountsthatwouldbeappropriateunderthealternativeriskassessmentsofmaximum,belowthemaximum,andlow.
Thepurchasingcycleispartofthelarger"
expenditurecycle"
thatcomprisesalltransactionsinwhichassetsareproducedoracquired,expensesareincurred,andpaymentsaremadetodischargeliabilitiesincurred.Sincetheexpenditurecycleistoobroadtobecoveredinasinglechapterandbecauseitisusuallymoreefficienttodividethecycleintomoremanageablesegmentswhenperforminganaudit,theexpenditurecycleisdiscussedinseveralchapters.Thediscussioninthischapterislimitedtotransactionsinvolvingpurchasesofandpaymentsforgoodsandservicesgenerally,includinghumanresources,sinceitisoftenthosetransactionsthataresufficientlynumeroustowarranttheinstallationofcontrolactivitiesdirectedatallcontrolobjectives.Expendituresthatpresentspecificauditingissuesarecoveredelsewhere.InventoriesandcostofsalesarediscussedinChapter19;
prepaymentsandaccruals,includingemployeebenefitexpense,inChapter20;
property,plant,andequipmentandrelatedaccounts,inChapter22;
incometaxaccounts,inChapter24;
andlosscontingencies,inChapter26.
14.1TypicalTransactionsandControls
Thepurchasingcycleinmostentitiescanbedividedintothreetypicalclassesoftransactions:
∙Acquisitionofgoodsandservices
∙Paymentsmadeforgoodsandservices
∙Goodsreturnedtosuppliers
Conceptually,payrollsarepartofthepurchasingcycle,buttherelatedcontrolsaresomewhatunique.Accordingly,twoadditionalclassesoftransactionsareoftenidentified:
∙Payrollprocessing
∙Paymentofwages
(a)AcquisitionofGoodsandServices
Theprocessofacquiringgoodsandservicesincludesthefollowingsteps:
∙Determiningneeds
∙Ordering
∙Receiving,inspecting,andacceptinggoods
∙Storingorusinggoods
∙Recordingthegoodsorservicespurchased
Inconsideringtheaccountingsystemthatprocessespurchasingtransactionsandthemonitoringandcontrolactivitiesappliedtothem,theauditorisinterestedmainlyincontrolstoensurethatallpurchasetransactionsthatactuallyoccurredareauthorizedandarerecordedaccurately;
thatis,thattheentity'
scontrolsachievethesevencontrolobjectivesdescribedinChapters9and11.Thosecontrolobjectivesarecloselyrelatedtotheauditobjectivesofcompleteness,accuracy,andexistence/occurrenceofpurchasingcycleaccounts,particularlypurchasesandaccountspayable.Othercontrols,whilenotdirectlyrelatedtothoseauditobjectives,alsomaybeofinteresttotheauditor.Forexample,managementreviewsofopenpurchaseordersmaygeneratereportstheauditorcanuseinevaluatingwhetherthereareunrealizedlossesonopenpurchasecommitments,whichaffectsthevaluationauditobjective.
Theparagraphsthatfollowdescribethevariousactivitiesinvolvedinthepurchaseofgoodsandservices,andthecontrolstypicallyappliedinprocessingthetransactions.Someoftheactivitiesdescribedinthissectionalsoapplytopurchasesofservices,whileothers,likereceiving,inspecting,storing,andusing,donot.Totheextentthattheprocessesaresimilarforbothgoodsandservices,thediscussionofcontrolsappliestopurchasesofservicesaswell.
(i)DeterminingNeeds.Thepurchasingcyclestartswhensomeoneidentifiesaneed,whichmayoccurinseveraldifferentways.Forexample:
∙Rawmaterialinventoryreplenishmentneedsmaybedeterminedbyapersonorautomaticallywhenstockonhandreachesareorderpointorwhenabillofmaterialsforajoborderisprepared.Somecomputerizedsystemsmayidentifyneedsbyreferencetorecordsofquantitiesonhandorproductionordersandsimultaneouslyexecutesomeofthestepsinthepurchasingprocess,forexample,selectingvendorsandpreparingpurchaseorders.Incertainsystems,rawmaterialneedsareidentifiedandtheorderisplacedwiththevendorwithoutanyhumanintervention;
theentity'
scomputercommunicatesdirectlywiththevendor'
scomputer.
∙Needsforoccasionalgoodsandservicesareidentifiedanddescribedbytheuser,usuallyonarequisitionformthatisthenapprovedbythepersonwithauthorityovertheuser'
sdepartmentortheparticulartypeofpurchase.
∙Theneedforsomeservicesthatareprovidedonarecurringbasisbythesamevendor,suchasutilities,telephone,periodicals,ormaintenanceservices,usuallyisdeterminedinitiallyandthereafterisprovidedcontinuouslyuntiltheendofthecontractperiodoruntilitisdeterminedthattheserviceisnolongerneededoradifferentsupplierisselected.
∙Determiningtheneedforspecializedservices,likeinsurance,advertising,andlegalandauditingservices,isordinarilytheresponsibilityofdesignatedindividuals.
∙Needsforfixedassetsusuallyareidentifiedbyacapitalbudgetingprocess.
Controlsoverrequisitionstypicallyincludereviewandauthorizationbyanappropriateindividualandaccountingforthenumericalsequenceofprenumberedrequisitionforms.Thosecontrolsaredesignedtoensurethatonlynecessarygoodsandservicesareorderedandthatallitemsrequisitionedareactuallyordered.Whilethepurposeoftheseproceduresismorecloselyrelatedtomanagement'
sdecisionmakingthantofinancialstatementassertions,thecontrolsmayhaveaneffectoncertainfinancialstatementaccounts.Forexample,ifreviewandauthorizationproceduresforrequisitionsareabsentorineffective,inventorymaybecomeoverstockedandeventuallyobsolete,therebyreducingitsvalue.
(ii)Ordering.Inmostlargeentities,speciallytrainedpurchasingagentsratherthanpersonnelfromuserdepartmentsdeterminesources,negotiateterms,andplaceorders.Controlsovervendorselectionandongoingmonitoringcanaffectbothaccountspayableandinventory.Aseparatepurchasingfunctioncanlowertheentity'
scostandenhancecontroloverpurchasesbyprovidingadivisionofduties.
Accumulatingrequisitionsbeforepurchaseordersareplacedrequiresspecializedskillsandexperiencetogroupitemsmostefficiently,concentrateorderstoobtainvolumediscountswhilealsomaintainingmultiplesourcesofsupply,solicitbidseffectively,negotiateschedulesforvendorproductionandstoragepriortodelivery,andgenerallygetthebestpossiblepricesandservices.Absentorineffectivecontrolsinthisareaareoftendifficulttoquantify,becausethecostofinefficientpurchasingisgenerallynotmeasurable,althoughineffectivecontrolsusuallyresultinanincreaseinthecostofitemsacquired.
Whenthepurchasingdepartmentreceivesarequisition,typicallyitfirstdeterminesthattheamountandtypeofgoodsorservicesbeingrequisitionedhavebeenapprovedbyanindividualwiththeappropriateauthority.Therequisitionthenservesasthesourcedocumentforinputtingtheorder.Therequisitioninformationisinputandmatchedagainstvendor,price,and(ifapplicable)inventorymasterfilestoassistinvendorselection,evaluatingquotedprices,anddeterminingtheaccuracyofproductnumbersordescriptions.Theintegrityofvendorstandingdataisachievedbylimitingchangestothevendormasterfiletopurchasingpersonnel.Thecompletenessandaccuracyofchangestothefilearereviewedafterthefilehasbeenupdated.
Afterallofthespecificinformationaboutthepurchase,suchastimeandmethodofdel
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