Question: 8.37: Prevent controls
- A pre-numbered cheque requisition is prepared for all payments.
- The details on the supplier’s invoice are matched to the appropriate receiving report.
- The details on the supplier’s invoice and receiving report are matched to an authorised purchase order.
- The cheque requisition is stapled to the authorised purchase order, receiving report and supplier’s invoice and forwarded to the appropriate senior staff member for review and authorisation.
- The authorised cheque requisition, together with the supporting documents, is passed to accounts payable for payment.
- Identify the key assertion at risk for payables in relation to payments made prior to receipt of goods.
- For the control procedures (1) to (5) for payables:
- Identify the key preventative internal control that directly addresses the risk of payments being made by Everfree Forest Hospital to its suppliers before the goods are received.
- Outline how your choice of the internal control in (i) will prevent payment to suppliers prior to receipt of goods.
- Design and describe in detail an appropriate test of control that you would use to satisfy yourself about the effectiveness of this internal control.
It’s that simple.Pay only when you are satisfied.
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