Indicate the function served by each procedure

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Reference no: EM132768948

Question - The following control procedures over purchases and cash disbursements transactions are prescribed by the Love Company:

1. Approved purchase order for each purchase.

2. Prenumbered receiving report for goods received.

3. Signed receipt from storeroom on acceptance of goods.

4. Matching of voucher with vendor's invoice.

5. Approved voucher for each check.

6. Cancellation of voucher on payment.

7. Review of voucher and supporting documentation by check signers.

8. Internal verification of voucher accuracy.

9. Locked storerooms for inventory.

10. Periodic reconciliation of inventory control and perpetual inventory records.

11. Accounting for all prenumbered checks in journalizing.

12. Periodic independent bank reconciliations.

13. No checks payable to cash or bearer.

14. Approved purchase requisition for each purchase order.

15. Review of purchase requisition for reasonableness.

REQUIRED -

a. Indicate the function served by each procedure.

b. Identify an error or irregularity that may be prevented or detected by the control procedure.

c. Indicate a compliance test that may be performed to determine whether the control procedure above is operating as prescribed.

Reference no: EM132768948

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