Internal controls over the processing of purchase orders function, the receipt of raw materials function, and the storage of raw materials function in the inventory and warehousing cycle are normally tested by the auditor as a part of performing tests of controls and substantive tests of transactions in the acquisition and payment cycle and the payroll and personnel cycle.

Question

Quizplus · Accepted Answer

The statement is true. Internal controls over the processing of purchase orders, receipt of raw materials, and storage of raw materials are all relevant to the inventory and warehousing cycle, which is part of the acquisition and payment cycle and the payroll and personnel cycle. These controls are normally tested by auditors as part of their testing of controls and substantive tests of transactions in these cycles.

Internal Controls Over the Processing of Purchase Orders Function, the Receipt