YouTube 字幕：
Audit Purchase and Expenditure Cycle

不必从头看完视频——获取完整字幕，搜索关键词，一键复制。

AutoDub

听懂YouTube外语视频

沉浸式YouTube翻译中文配音

告别语言障碍，拥抱全球优质内容

免费使用

视频字幕

视频摘要

Summary

Core Theme

This chapter details the auditing and assurance services related to the acquisition and expenditure cycle, emphasizing the process of identifying risks, implementing internal controls, and performing audit procedures to ensure the accuracy and completeness of financial records concerning purchases and expenses.

Mind Map

点击展开

点击探索完整互动思维导图

[Music]

hello and welcome to chapter 8 auditing

and Assurance services in this chapter

we are going to discuss the acquisition

and expenditure

cycle so show those numbers to the

Auditors and I'll throw your out of the

window so this was actually buddy Gates

which was the director of

Worldcom uh of General accounting and

this was what was noted that he said to

an employee asking for an explanation of

a large accounting discrepancy that

related to the expenditure cycle so if

you think these things cannot happen in

business trust me they do so here are

our learning objectives for this chapter

we're going to describe the acquisition

and expenditure cycle typically looking

at some Source documents we're going to

identify significant accounts and the

relevant management assertions that

relate to the acquisition and

expenditure cycle we're going to discuss

the risk of material misstatement in the

acquisition and expenditure cycle and

we're going to identify important

internal control activities that are

present in a properly designed system to

mitigate that risk of material Mist

statement for each relevant assertion in

the acquisition and expenditure cycle

we're going to discuss test of controls

uh to test the operating effectiveness

of internal controls in the acquisition

and expenditure cycle also we're going

to look at substantive procedures in the

acquisition and expenditure cycles and

relate them to the management assertions

about significant account balances at

the end of the period and you are going

to apply your knowledge to perform these

audit procedures in the acquisition and

expenditure cycle and evaluate the

findings of your tests and in the

appendix we're going to discuss the

payroll cycle including risks Source

documents and controls so let's get

started so here is a great flowchart and

you can see start here of the

acquisition and expenditure cycle and

then you see there is a purchase

requisition and then that turns into a

purchase order and then that purchase

order goes to the vendor and then

hopefully we receive the goods and

services with a bill of lading or a

receiving report and then we have the

invoice here and then we have that we

record the invoice and then we have all

of the supporting documentation and this

is where we start to audit right we want

to see the voucher the invoice the

receip receiving report the purchase

order the requisition and the check copy

and so that is how the whole cycle is

done and so the most important part from

an Auditor's perspective is to ensure

that you understand the process and this

would be part of our working

papers so the basic activities that we

test as an auditor is the purchases of

goods and services right so does the

department request the purchase of the

items through a purchase requisition and

you might have some bidding that may be

involved when you have higher dollar

purchases then you have the purchasing

department that prepares the purchase

order and it's approved by the

appropriate person and um it could also

be done through an automatic

replenishment system so when you reach a

certain level let's say an inventory

that you don't have or you have you need

more then you it would automatically do

that for you and then we want to receive

the goods and services and here you know

when they are received we either have

that receiving report then you want to

record whether we are recording an asset

or an expense and lastly you want to pay

the invoice and ensure that your vendors

are happy

too so here we're looking at each of the

accounts and the assertions so we're in

the risk assessment phase here and when

you're talking about accounts payable

you have these assertions that relate to

it completeness cut off existence

presentation and valuation and similarly

with expenses we have completeness cut

off accuracy and classification and keep

and remember keep in mind that these are

Management's assertions and we as

Auditors are testing

those so here we have some issues and as

you can see we have Worldcom Waste

Management Hines

corporation uh and several others and

you see the restatement amount that

related to cost and expenses and so you

could see it could be as 11 billion

dollar or as little as 16 million but

either way it's material and these are

some of the cost and expense Capers that

have happened and then we have here our

internal control activities that we're

talking about and basically we have our

accounts payable and our expenses the

relevant management assertion and what

could go wrong so typically with

accounts payable we have that the

liabilities are not recorded or they're

not recorded in the correct period or

they just don't present the actual

obligation of the company or they're not

recorded in the proper amount or

disclosed in the footnotes whereas with

expenses same thing right not all

expenses are recorded not in the correct

period or with the wrong amount as

well so we have control procedures right

and so there's information processing

control so we want to compare the

purchase order with the bill of lading

and with the company's purchase um order

as well we want to compare the

quantities against the receiving report

and the purchase order order so this is

part of our substantive testing that we

do as Auditors so you want to compare

prices between what's on the invoice and

what was quoted you want to recompute

the vendor's invoices determine when to

pay and then properly prepare the

vouchers so these are all the procedures

that hopefully we see within the

organization obviously separation of

Duties is one of the simpler internal

controls that we can have in an

organization so the authorization of a

purchase is usually done by the

purchasing department but then the

custody of the items is usually handled

by the receiving department transactions

are recorded by accounting or accounts

payable department uh or and then you

reconcile the liabilities to the

customer statement and then bids are

usually received by some independent

person outside of the purchasing

decision then we have physical controls

so in these physical controls what we

have is we might prepare the receiving

report once we get the receipt of the

inventory then you want to count and

verify those quantities upon delivery to

the inventory warehouse and obviously

restrict access then we also have

performance reviews as a type of control

procedure so you want to compare the

purchasing data from previous years to

what we expected for this year and you

want to review the bids to ensure that

documentation exists regarding the

selection of the

vendor so here we have some internal

control activities um within the

expenditure and acquisition cycle so

here we have the account that we're

talking about accounts payable the

relevant management assertion such as

completion and what could go wrong are

the liabilities are not recorded but we

added now the internal control activity

so in this case we would have the

receiving reports that should be

prenumbered and used in order and all

receiving reports uh are completed by

the end of the period should be be

accounted for in that period for cut off

payables are recorded in the first weeks

of the period should be compared to

those receiving reports um and invoices

for that recording period when we're

talking about existence we want to make

sure that the voucher packages for

payments to vendors should include your

purchase orders and your receiving

reports and the vendor should be part of

that Master approved vendor list and a

three-way match should be performed

where you're looking at the purchase

order the receiving report and the

invoice then for presentation you want

to make sure that the chart of accounts

is used for classifying those purchase

transactions and for the valuation

assertion you want to make sure that the

prices on the vendor invoices are agreed

to that price list and test for

mathematical accuracy now when we're

looking at the expenses we're still

looking at completeness but we should

also use the prenumbered vouchers

receiving report reports and purchase

orders and checks in that numerical

sequence when we're looking at cut off

compare the actual expenses with the

budgeted amount for accuracy we're going

to match the invoices or work orders for

the proper cost or of the items or the

services performed and for

classification we're looking to make

sure that the expenses are recorded in

the proper

account so now we have a test of

internal controls so in this column here

is what the auditor would do so in order

to test the internal control and

remember these are attribute testing

right when we test internal controls

we're looking for something so in this

case when we're looking at accounts

payable for the completeness assertion

we're verifying the sequence of those

prenumbered receiving reports we're

inspecting evidence that there was some

management review or that something

happened with the

unmatched receiving reports when we're

looking at cut off we're tracing those

receiving reports and invoices ensuring

that it was recorded in the proper

period for the Existence assertion on

accounts receivable we are vouching a

sample of payments to vendors for that

three-way match and that's like proba

and that's where RPA here robotic

process automation can help us in the audit

audit

process then when we're looking at

presentation we're looking to see if

there's a chart of accounts for and then

when we're looking at the relevant uh

assertion valuation we're looking to

make sure that there is a price list and

that mathematical accuracy was

performed and then when we're looking at

the expenses we're doing something very

similar as well for completion for for

completeness we are looking at the

numerical sequence uh we are also

examining evidence to make sure that we

compare budget to actual and that any

unusual amounts are addressed and then

we're looking when we're looking at

accuracy we're trying to inspect

evidence between you know the expenses

and the invoices and for classification

we're looking at the journal entries to

ensure that they were recorded

properly and then we have several other

additional uh tests of internal controls

so for example we can look for the

segregation of Duties we can trace

receiving reports to the purchase

journals we can also scan purchase

journals uh and purchase orders for like

the numerical sequence we can do this

same thing with cash

dispersements we can examine evidence

that the managers reviewed the analyses

and followed up on it and maybe look at

the actual versus budget as

well and then when we're looking at

accuracy we want to make sure that we

examine the contracts for authorization

possibly observe the client receiving

the quantities showing evidence of that

documentation looking at the vendor

statements and you know making sure that

there's a recalculation of the price uh

look for approval for that payment look

for manager review of the journal

entries and maybe review the reconciling

items so as you can see from an

Auditor's perspective we are keeping

busy and trying to check the internal

controls and then perform additional

tests of internal controls so we're

looking again more as inspection of

evidence and making sure that the

accounts are recorded correctly in the

account CL classification that's the

name of the game so then we have

direction of the tests so you can go

either way as you can see from the

direction of the arrows so you can go

from the vendor invoices to the purchase

journals or from the vendor invoices to

the receiving report but that is our

three-way match right so that's

basically what we're trying to do when

we're testing substantively testing uh

re for

expenditures then we move from the risk

assess ment to the audit evidence so

when and this would be our workpapers

right our audit workpapers so we're

going to be searching for unrecorded

liabilities so we're going to ask hey

how does the client identify unrecorded

liabilities we're going to scan the open

purchase order file we are going to

examine any unmatched vendor statements

or invoices on any unmatched receiving

reports we're going to confirm the

accounts payables with suppliers and

we're going to review the cash

dispersements that happen at the end of

the year to provide this audit evidence

that we need to perform our substantive

procedures then we're going to look at

purchase cut offs and when we're looking

at C offs we're examining the receiving

reports and the invoices that happened

around year end to make sure that they

were recorded in the proper

period and then we're going to look at

several other accounts within this cycle

so we might look at prepaid expenses

we're going to look at acred liabilities

maybe other expenses such as repair and

maintenance legal we're going to check

out inventory and property plant and

Equipment as

well and here's an example of an account

analysis for prepaid expenses so you see

we do have the actual uh link here to

the workpapers and you notice that we

have our tick marks right

here and then you see F is for footed so

we're footing everything and you see how

every number has some type of tick mark

so I should be able to pick up this

workp paper and know exactly who

prepared it who reviewed it and the work

that was performed as you can see so

every number should have a tick mark on

it that shows what you've done and here

where you're cross putting it to another

uh workpaper and then you see that we're

looking at the audited balance the

addition the disposals and what we've

done that we've calculated it and where

we've traced that to another workpaper

X10 X11 or X12 and then you can look at

the two to see all of the substantive

procedures that were

performed so for ACR liabilities we may

have a major difference between those

acred liabilities and accounts payable

so we might have some issues with

property taxes wages income taxes and

these types of payables aren't normally

invoice or they really do not have a

receipt of goods so this can make it a

little bit more difficult for us as

Auditors to detect the unrecorded

acrs so when we're auditing the acred

liabilities and the prepaid expenses

accounts we're pretty much agreeing the

balances to Prior year workpapers which

we saw in that schedule verifying

payments examining the agreements

recalculating amounts and agreeing the

expenses to the trial balance looking

for those unrecorded acral by by

reviewing the cash dispersements at the

end of the year and looking for any

expected acrs at other stages in the

audit if we're looking for bonds or for

notes and perform our analytical

procedures to make sure that everything looks

looks

good then for income taxes payable taxes

can be a doozy right they can be a

complex area and usually companies work

within multiple uh tax jurisdictions so

you would probably get we probably get

our tax specialist in our office to help

us with that but we would vouch the

payments and we would look and examine

at everything and make sure that we're

adhering to all of the auditing

estimates then when we're auditing PPN

right property plant and Equipment we're

looking at a general approach right

we're looking for maybe small numbers of

transactions some high dollar amounts or

that the authorizations of those

transactions was actually given and

we're not as concerned for the access to

the assets but we're mostly concerned

that we don't have any unrecorded

disposals and then what we're going to

do with ppne is we're going to take

those balances and agree to them to the

prior year documentation we're going to

look at those purchases vouch them to

the invoices inspect the title and make

sure that we vouch those to the board

minutes then for the expenditures

subsequent to acquisition we're going to

vouch those to the invoices and the work

descriptions and make sure that they are

properly classified as either an expense

or capitalized if it

qualifies and then when we're looking at

the disposal of property plant and

Equipment we're vouching right to the

minutes of the board we're vouching the

cash receipts journal and the validated

depart deposit slip recalculating the

gain or loss make sure that we Trace

that to the board minutes for

completeness and then when we're looking

for unrecorded disposals we're going to

to agree the balance to Prior year work

papers look at the insurance policies

and the property tax records and inspect

or confirm the fixed assets whether they

were existing and newly

Acquired and then we're going to look at

depreciation expense making sure that we

recalculate it with the useful life the

salvage value the cost and pretty much

evaluate it based on the reasonableness

of those estimates and is depreciation

consistent with the company policy then

we're going to take a look at the lease

agreements make sure that they're

treated properly and ensure that the

disclosures are in the foot

notes and here we have again a uh

property plant and equipment and

depreciation schedule and as you can see

at the top we have our uh work paper and

then we have each of the buildings and

you see the the tick marks as well that

we agreed it to the prior documents and

as with the prepaid expenses you see

most most of the numbers here have some

type of tick mark so again I should be

able to pick up this workpaper and know

exactly what the Auditors performed and

how they did their

work and then when we're looking at

auditing cost and expense accounts we're

looking at the analytical procedures

relating the expense to the balance

sheet account and making sure that we do

perform those substantive tests of

transactions and vouch to the details

and one of my favorite topics is fraud

and so when you have to and we all know

that in auditing we have to look an

audit for fraud so if we review for

fraud risk if it tells us that there

could be a potential significant risk

that fraud is occurring within the

acquisition and expenditure cycle then

we have to do several types of searches

and we would do those with cats computer

assisted auditing tools so in this case

what we can do and this is again again

where data mining software such as idea

or altrix can really help us and robotic

process automation can help us where we

can inspect invoices for photoc copies

looking at the vendor invoices that were

submitted in numerical order looking

making sure that vendor invoices that

are always in round numbers to kind of

help us see if there's any fraud we can

scan those invoices to see if there was

a lower uh than a review threshold we

can also look to make sure there's no

boxes or that the invoices do have phone

numbers and that those addresses and

phone numbers match what we have in the

vendor Master file we could also vouch a

sample of vendor invoices to the

approved vendor list and so this is all

types of procedures that we can do to

try to find fraud in accounts

payable and here we have the pcaob

inspections and the of what they're

telling us right that the pcaob is

required to perform detailed inspections

of the audit process employed by each

firm's auditing publicly traded

corporations and a formal inspection

report is issued by the pcaob for each

firm and in a recent inspection report

the pcaob highlighted the importance of

testing uh clients accounting for income

taxes and here you see that and so this

was the report on the 2019 inspection of

grand Thorton by the pcaob

pcaob

and then here we have for property plant

and Equipment based on the same report

that the pcaob is required to do this

and then the firm selected for testing a

control that included the issuer's

review of possible impairment indicators

for property plant and equipment at one

of the issuers subsidiary and the firm

did not evaluate one whether the control

was appropriately designed to identify

the impairment indicators that were

present and two the review procedures

that the control owner performed

including the procedures to identify

items for followup and the procedures to

determine whether those items were

appropriately resolved Additionally the

pcaob noted that in performing its

substantive procedures related to the

issuer's assessment of the possible

impairment of this property plant and

Equipment The Firm did not evaluate the

issuer's determination that there were

no indicators of potential impairment

Beyond inquiry of management and here

you see the auditing standards that

relate to that so the pcob in their

inspections basically is pretty much

saying what Grand Thorton in this case

failed to

perform and then the last piece is the

payroll cycle and so often we um process

this by service organization so our

socker report and then we have the

balance sheet accounts are usually

pretty small so what Auditors typically

do is rely on the test of controls and

the substantive testing of

transactions and there are some risks

associated with the payroll cycle

especially with fraud so ghost employees

where you're paying people that don't

exist or overpaying or padding the time

uh have some classification errors with

incorrect accounting or you forget to

pay third parties such as your payroll

taxes or your insurance so those are the

types of inherent risks and we know

inherent risk is part of our overall

audit risk

model and here we have the typical

activities within a payroll cycle where

we start you know with compensation we

have to make sure that we record keep we

make sure that we have our timekeeping

records our government and payroll taxes

our payroll register make sure we're

recording it properly and that we're

giving out the payroll checks

accordingly so when we're talking about

the payroll cycle we are talking about

Personnel authorization forms right to

authorize all payroll related

transactions and employees should record

their hours using time sheets and then

supervisory Personnel will hopefully

review those time sheets and verify the

distribution of the Hours worked now the

payroll department will process payroll

and then they'll do the payroll register

and the checks then we have the cash

dispersement or the treasurer that will

review that payroll register and compare

it to the payroll checks and the payroll

checks are signed by an authorized party

and then given to the

employees and here we have several

control activities where physical

controls segregation of Duties and

performance reviews so we want to

physically control the payroll checks

and the signature plates we want to make

sure that the checks are distributed by

a person that isn't involved in the

process or recording of payroll we also

want to make sure that the payroll

checks distributed uh to individuals

with it with providing proper

identification and any unclaimed pay

payroll checks are stored in a secure

location obviously with segregation of

Duties we want the Personnel department

and the hiring and employee Department

to authorize those payroll transaction

payroll is recorded by the payroll

department and general accounting and

then the cash dispersements department

or treasure keeps custody of those

payroll checks with performance reviews

we're looking at payroll transaction

data and we're looking at it comparing

prior year or to budgeted and expected

we're also reviewing the payroll

sure that the payroll bank account is

reconciled as

well and then we have actual management

reports and files within the payroll

cycle right so we have Personnel files

we want to make sure the payroll

analysis any clearing accounts are

reconciled making sure that we adhere to

the government and tax reports and

year-to-date earnings records and

W2s and that concludes our Le pressure

on the acquisition and expenditure cycle

点击任意文字或时间戳，即可跳转到视频对应位置

大多数字幕 5 秒内即可准备好

一键复制125+ 种语言搜索内容跳转到时间戳

粘贴 YouTube 链接

输入任意 YouTube 视频链接，获取完整字幕

大多数字幕 5 秒内即可准备好

安装 Chrome 扩展

无需离开 YouTube，一键获取视频字幕。安装我们的 Chrome 扩展，直接在视频页面访问任意视频的完整字幕。

免费添加到 Chrome

支持 YouTube、Coursera、Udemy 等主流教育平台

快速获取字幕：直接修改地址栏中的域名即可！

YouTube

←

→

↻

https://www.youtube.com/watch?v=UF8uR6Z6KLc

YoutubeToText

←

→

↻

https://youtubetotext.net/watch?v=UF8uR6Z6KLc

YouTube 字幕正在为您准备结果……

YouTube 字幕：Audit Purchase and Expenditure Cycle