Methodology for Designing Tests of Controls and Substantive Tests of Transactions
Methodology for Designing Tests of Controls and Substantive Tests of Transactions
Mary Williams
Chapter 18
18-21
1Trace transactions recorded in the acquisitions journal to supporting documentation, comparing the vendors name, total dollar amount and the authorization for acquisition. BOTH
Purpose of procedure is accuracy; Recorded acquisition transactions are accurate
2Examine documents in support of acquisition transactions to make sure that each transaction has an approved vendors invoice, receiving report, and purchase order included CONTROL
Purpose of procedure is occurrence; Recorded acquisitions are for goods and services received, consistent with the best interests of the client
3Foot the cash disbursements journal, trace postings of the total to the general ledger and trace postings of individual cash disbursements to the accounts payable master file TRANSACTION
Purpose of procedure is posting and summarization-Cash disbursement transactions are correctly included in the AP master file and are correctly summarized
4Account for a numerical sequence of checks in the cash disbursements journal and examine all voided or spoiled checks for proper cancellation. CONTROL
Purpose of procedure is COMPLETENESS; existing cash disbursement transactions are recorded.
5Prepare a proof of cash disbursements for an interim month. TRANSACTIONS Purpose of procedure is accuracy;