Identify the types of specific control activity to which each ‘internal control’ applies:

Question

The following are internal controls that theauditor has identified for various cycles.1. Sales invoices are matched with shipping documents and customer orders beforerecording in the sales journal.2. Receiving reports are prenumbered and accounted for on a daily basis.3. Sales invoices are independently verified before being sent to customers.4. Payments by check are received in the mail by the receptionist, who lists the checksand restrictively endorses them.5. Overtime hours for payroll are approved by the employee’s supervisor.6. Checks are signed by the company president, who compares the checks with theunderlying supporting documents.7. Unmatched shipping documents are accounted for on a daily basis.8. All payroll payments must have a valid employee identification number assigned bythe human resources department at the time of hiring.9. The accounts receivable master is reconciled to the general ledger on a monthly basis.a. For each internal control, identify the type(s) of…

Answer 1

Question

Chapter 11, Problem 24DQP

a.

To determine

Identify the types of specific control activity to which each ‘internal control’ applies:

b.

To determine

Identify the transaction-related audit objective to which it applies for each internal control:

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The following are internal controls that theauditor has identified for various cycles.1. Sales invoices are matched with shipping documents and customer orders beforerecording in the sales journal.2. Receiving reports are prenumbered and accounted for on a daily basis.3. Sales invoices are independently verified before being sent to customers.4. Payments by check are received in the mail by the receptionist, who lists the checksand restrictively endorses them.5. Overtime hours for payroll are approved by the employee’s supervisor.6. Checks are signed by the company president, who compares the checks with theunderlying supporting documents.7. Unmatched shipping documents are accounted for on a daily basis.8. All payroll payments must have a valid employee identification number assigned bythe human resources department at the time of hiring.9. The accounts receivable master is reconciled to the general ledger on a monthly basis.a. For each internal control, identify the type(s) of…

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