A Retail Company Uses a Computer Program That Matches Electronic

question 72

Multiple Choice

A retail company uses a computer program that matches electronic vendor invoices with the applicable purchase orders and receiving information, which are also maintained electronically. If an invoice does not match the other items within predefined ranges, a report is generated and sent to the accounts payable department for further investigation. All of the applicable documents are electronically marked, cross-referenced, and retained in open files. Both an integrated test facility and a systems control audit review file (SCARF) have been included in the system. An auditor wants to determine the extent to which items are not matched at year end and to investigate the potential causes of the unmatched items. Which of the following audit procedures would be most effective in determining the items to investigate?

• A) Use generalized audit software to read the electronically marked unmatched items.
• B) Use generalized audit software to read the purchase orders and trace to applicable receiving and vendor invoice files.
• C) Use the SCARF to identify unusual items. Select an attributes sample and trace to the underlying documentation.
• D) Submit test data to identify attributes of unmatched items. Follow up by investigating the identified attributes.

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Definitions:

Promoter

An individual or company that helps raise capital, organize, and start a business or event.

Liability

A legal responsibility or obligation, particularly in terms of debts or financial compensation for loss or damage caused by one's actions or inactions.

Preincorporation Contracts

Agreements entered into on behalf of a corporation before it is legally formed, for which the corporation may later assume liability.

Promoter

An individual or company responsible for organizing and financing the initial operations of a business venture or organizing events, often taking significant financial risks.