A company employs three accounts payable dlerks and one treasurer. Their respons

Question

A company employs three accounts payable dlerks and one treasurer. Their responsibilities are as follows: Employee Clerk 1 Clerk 2 ponsibility Reviews vendor invoices for proper signature approval. Enters vendor invoices into the accounting system and verifies payment terms. Posts entered vendor invoices to the accounts payable ledger for Payment and mails checks. Reviews the vendor invoices and signs each check. Clerk 3 Treasurer Which of the following would indicate a weakness in the company's internal controls? O Clerk 1 opens all of the incoming mail. O Clerk 2 reconciles the accounts payable ledger with the general ledger monthly O Clerk 3 mails the checks and remittances after they have been signed. O The treasurer uses a stamp for signing checks. QUESTION 3 2.5 points Sa Regardless of the assessed level of control risk, an auditor of a non-public company would perform some O tests of controls to determine the effectiveness of internal control policies. O analytical procedures to verify the design of internal control activities. O substantive tests to restrict detection risk for significant transaction classes. O dual purpose tests to evaluate both the risk of monetary misstatement and preliminary control risk. QUESTION 4 2.5 pointsSav An auditor is considering whether the omission of the confirmation of investments impairs the auditor's ability to support a previously expressed unmodif opinion. The auditor need not perform this omitted procedure if o the results of alternative procedures that were performed compensate for the omission. the auditor's assessed level of detection risk is low. the omission is documented in a communication with the audit committee. O no individual investment is material to the financial statements taken as a whole.

Explanation / Answer

ans)

1. (c) Clerk 3 mails the checks and remittances after they havebeen signed.

3.(C) Substantive tests to restrict detection risk for significant transaction classes.

4. (a) The result of alternative procedures that were performed compensate for the omission.

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