When Fidelio plc receives a payables invoice it is: checked by the accounts clerk for accuracy, matched against the purchase order, and the goods received note, then authorized by the line manager who signs it to verify that it has been authorized.
How can the auditor test this process?
A) Walk through the whole process with sample of invoices to check the procedures are being evidenced
B) Identify areas of audit risk within the process and test that area
C) Select a sample from each stage of the process and test for evidence that the procedures are carried out
D) Observe the processing of invoices and note the process is being carried out in full

Question

When Fidelio plc receives a payables invoice it is: checked by the accounts clerk for accuracy, matched against the purchase order, and the goods received note, then authorized by the line manager who signs it to verify that it has been authorized.
 How can the auditor test this process?
A) Walk through the whole process with sample of invoices to check the procedures are being evidenced
B) Identify areas of audit risk within the process and test that area
C) Select a sample from each stage of the process and test for evidence that the procedures are carried out
D) Observe the processing of invoices and note the process is being carried out in full

Quizplus · Accepted Answer

The auditor should select a sample from each stage of the process and test for evidence that the procedures are carried out. This will provide the auditor with assurance that the process is operating as intended and that the controls are effective.

When Fidelio Plc Receives a Payables Invoice It Is: Checked