Reference no: EM133183471

Question - David is a new recruit of Doris & Peter CPA and assigned to the audit of a large manufacturer in the city. In the preliminary audit, Anthony, David' supervisor, asks David to find out the internal control procedures of the client. In particular, he is interested in the purchase and payment cycle and requires David to ascertain whether the following procedures are performed by the client.

1. The manager of the requisition department approves the requisition form.

2. The purchasing manager invites vendors on the approved list for quotation.

3. The accounts payable clerk staples the receiving report and approved purchase order to vendor's invoice when he/she prepares the purchase journal.

4. The accountant cancels the supporting documents when cheques are signed.

5. The data entry clerk reconciles the batch summary total with the computer processing report for payment.

Required - For each of the above control procedures, identify the transaction-related audit objective(s) and discuss an audit test that could discover misstatements if the controls do not work effectively.