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

To determine if cheques are being issued for unauthorized expenditures, an auditor would select from the population of cancelled cheques. This allows the auditor to trace the cheques back to the supporting documentation (approved payables voucher, purchase order, and receiving report) to verify authorization and completeness of the transaction.

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