Chapt ter 18 p AUDIT OF THE ACQUISITION AND PAYMENT CYCLE: TESTS OF CONTROLS. SUBSTANTIVE TESTS OF TRANSACTIONS AND ACCOUNTS PAYABLE FALSE PURCHASES CAMOUFLAGE OVERSTATED PROFITS Arens, Loebbecke, Auditing, &/E @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Chapter 18 AUDIT OF THE ACQUISITION AND PAYMENT CYCLE: TESTS OF CONTROLS, SUBSTANTIVE TESTS OF TRANSACTIONS, AND ACCOUNTS PAYABLE FALSE PURCHASES CAMOUFLAGE OVERSTATED PROFITS
Accounts and classes offransactions in the Acquisition and payment cycle I. Acquisition of goods and services 2. Cash disbursements 3. Purchase returns and allowances and purchase discounts @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Accounts and Classes of Transactions in the Acquisition and Payment Cycle 1. Acquisition of goods and services 2. Cash disbursements 3. Purchase returns and allowances and purchase discounts
Accounts in the acquisition and payment cycle Cash in bank Raw material purchases Accounts payable FIGUrE 18- Acquisitions Purchase returns Property, plant, and allowances and equipment di Purchase discounts Prepaid expenses Manufacturing expense Selling expense Administrative expense control account control account control account Subsidia Commissions Travel expense Officers travel Repair and maintenance livery expense Legal fees Ing reight in @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. FIGURE 18 -1 Accounts in the Acquisition and Payment Cycle
BUSINESS FUNCTIONS IN THE CYCLE AND RELATED DOCUMENTS AND RECORDS e Processing Purchase Orders Purchase Requisition Purchase order Receiving goods and Services Recognizing the liability Acquisitions Journal Summary Acquisitions report Vendor 's invoice Debit memo Voucher Accounts Payable master file Accounts Payable Trial Balance Vendor's statement Check Arens, Loebbecke, Auditing, &/E I Cash Disbursements Journal @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. BUSINESS FUNCTIONS IN THE CYCLE AND RELATED DOCUMENTS AND RECORDS Processing Purchase Orders Purchase Requisition Purchase Order Receiving Goods and Services Recognizing the Liability Acquisitions Journal Summary Acquisitions Report Vendor’s Invoice Debit Memo Voucher Accounts Payable master file Accounts Payable Trial Balance Vendor’s Statement Check Cash Disbursements Journal
fable- Classes of Transactions Accounts Business functions and Related Documents and records for the acquisition and Payment Cycle Classes of transactions Accounts Business functions Documents and records Acquisitions Inventory Processing purchase orders Purchase requisition Property, plant, and equipment Purchase order Prepaid Leasehold improvements Accounts payable Manufactu Selling expenses Administrative expense Receiving goods and services Receiving report Recognizing the liability Acquisitions journal Summary acquisitions report Vendor' s invoice Debit memo Accounts payable master file Accounts payable trial balance Vendor' s statement Cash disbursements Cash in bank(from cash Processing and recording cash Check disbursements) disbursements Cash disbursements journal Accounts payable Purchase discounts @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. FABLE 18 -1 Classes of Transactions, Accounts, Business Functions, and Related Documents and Records for the Acquisition and Payment Cycle