You are part of the engagement team for the audit of Suzuki Manufacturing for the year ended December 31, 2019, and are responsible for auditing the acquisition cycle. Download the Excel file for the problem from the textbook website, which contains a worksheet with acquisition transactions for the year, and a second worksheet with the approved vendor list. Use Excel or audit software such as ACL or IDEA to perform the testing.
1. The company issues voucher numbers in sequential order. Use the transaction file to
determine whether there are any gaps or duplicates in the voucher sequence.
2. All acquisitions are supported by receiving reports. Identity any gaps or duplicates in the sequence of receiving reports, and any acquisitions not supported by a receiving report.
3. Summarize acquisitions by customer number. The company is required to disclose
all vendors who represent greater than 5 percent of acquisitions of the year. Identify
the vendor number, name, and amount of purchases for any vendor that meets the
disclosure criteria.
Required
Required
Data
Analytics
Chapter 18 / AUDIT OF THE ACQUISITION AND PAYMENT CYCLE 647
4. Verify that all acquisitions in the transaction file are from authorized vendors in-
cluded in the vendor master file.
5. Identify vendors in the vendor file that are not included in the acquisition file. These
vendors may be included in a sample of zero-balance confirmations at year end.
a. Indicate the audit objective(s) tested by each of the five audit procedures listed above.
b. Document any exceptions identified in your testing, including associated document
numbers.
c. Assume your initial assessment of control risk was low for each of the seven
transaction-related audit objectives. Based on the exceptions found, indicate which
audit objective(s) should have an increase in control risk