AYB301 Lecture Notes - Lecture 10: General Ledger, Global Crossing, Fixed Asset
Document Summary
Lecture 10 auditng acquisitions and property, plant and equipment. The acquisition cycle covers the purchase, receipt, payment and accounting for goods and services. Main phases are: authorised requisitions, authorised purchases, receipt of goods and services, approval for payment, cash disbursement. Acquisition cycle deals with receipt of all goods and services. Misstatements may occur just because of the volume of transactions. Fraud is a major concern in the acquisition cycle. Red flags in the acquisition and payment cycle. There are a number of red flags unique to the acquisition and payment cycle. Results can be compared to clients past performance, industry results and auditor"s expectations. Overview of control procedures and control risk assessment. Requisition of goods or services: need identified, pre-numbered requisition form completed and sent to purchasing. Purchase of goods or services: purchase order shows quantity and price of goods ordered, quality specifications, shipping terms, purchase orders are pre-numbered to establish completeness, purchase orders must be properly authorised.
