While Undertaking the Audit of the Payables and Disbursements System

question 2

Multiple Choice

While undertaking the audit of the payables and disbursements system at Broil Ltd, you find that the internal control questionnaire indicates that an approved receiving report is required to accompany every cheque request for payment of merchandise.Which of the following tests of control would provide you with the greatest assurance that this control is operating effectively?

• A)Select and examine receiving reports and ascertain that the related voucher documents are dated no later than the receiving reports.
• B)Select and examine receiving reports and ascertain that the cancelled voucher documents are dated no earlier than the receiving reports.
• C)Select and examine voucher documents and ascertain that the related receiving reports are dated no later than the date of payment.
• D)Select and examine voucher documents and ascertain that the related receiving reports are dated no earlier than the date of payment.

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Definitions:

Conviction

A firmly held belief or opinion or the formal declaration that someone is guilty of a criminal offense, made by the verdict of a jury or the decision of a judge in a court of law.

Canadian Criminal Code

The body of criminal law that regulates offenses and procedures in Canada, specifying what actions constitute crimes and their respective punishments.

General Practitioners

Medical doctors who provide primary and continuing care in the community, treating patients with a wide range of health issues.

Sanity

A legal term referring to an individual's ability to understand right from wrong and the nature of their actions at the time of a crime.