A company's internal control system requires that an approved payables voucher, supported by a purchase order and a receiving report accompany every cheque requisition.To determine whether cheques are being issued for unauthorized expenditures, an auditor is most likely to select items for testing from the population of all
A)Purchase orders.
B)Cancelled cheques.
C)Receiving reports.
D)Approved vouchers.

Question

Quizplus · Accepted Answer

Cancelled cheques are the best source to test for unauthorized expenditures because they represent actual payments made, and the auditor can trace them back to the supporting documentation to verify authorization.

A Company's Internal Control System Requires That an Approved Payables