With Regards to Control Risk Assessment for Purchase Transactions, Align

question 18

Essay

With regards to control risk assessment for purchase transactions, align the potential misstatements in the following chart with their possible tests of operating effectiveness.
$$\begin{array} { | l | l | } \hline \text { Patential Misstatenent } & \text { Passible Tests d Operating Eifectiveness } \\\hline \begin{array} { l } \text { Goods rnay be requisitioned for urauthorised } \\\text { puposes. }\end{array} & \text { Inspect sigred irventory receipts. } \\\hline \begin{array} { l } \text { Purchases may be made for urauthorised } \\\text { puposes. }\end{array} & \begin{array} { l } \text { Exarnine supporting documentation for } \\\text { irvoices. }\end{array} \\\hline \text { Goods received may not have beer ordered. } & \begin{array} { l } \text { Exarnine receiving report for matchirg } \\\text { purchase order. }\end{array} \\\hline \begin{array} { l } \text { Stores clerks may deny taking custody of } \\\text { purchased goods. }\end{array} & \begin{array} { l } \text { Exarnine purchase orders far approved } \\\text { requisitions. }\end{array} \\\hline \begin{array} { l } \text { Irvoices may be recorded for goods not } \\\text { ordered. }\end{array} & \begin{array} { l } \text { Exarnirue evidence of independent check, or } \\\text { re-perfonm independent check }\end{array} \\\hline \begin{array} { l } \text { Irvoices may be recorded incorrectly or not } \\\text { recorded. }\end{array} & \text { Enquire about procedures. }\\\hline\end{array}$$

---

Definitions:

Ending Inventory

At the conclusion of a financial cycle, the cost of products up for sale is figured out by taking the starting inventory, adding any acquisitions, and deducting the expense associated with the goods that have been sold.

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and the cost of goods sold based on the average cost of all goods available for sale during the period.

Conversion Costs

The combination of direct labor costs and manufacturing overhead costs, representing the costs to convert raw materials into finished products.

Processing Department

A section or unit within a manufacturing facility where a specific type of processing or operation is carried out.