An entity's internal control requires for every check request that there be an approved voucher,supported by a prenumbered purchase order,and a prenumbered receiving report.To determine whether checks are being issued for unauthorized expenditures,an auditor most likely would select for testing from the population of:
A)Purchase orders.
B)Canceled checks.
C)Receiving reports.
D)Approved vouchers.

Question

Quizplus · Accepted Answer

Canceled checks are the most direct evidence of payments made and thus are the best choice for testing whether checks are being issued for unauthorized expenditures. By examining canceled checks, an auditor can trace back to the supporting documents (approved voucher, purchase order, and receiving report) to verify that each payment was properly authorized and supported.

An Entity's Internal Control Requires for Every Check Request That