Pinnacle manufacturing control risk matrix

Related party purchases and payables 4. Recording the Payable The copy of the purchase order sent to the accounting department notifies them that there will be a future cash disbursement. Internal Control — Cash Disbursements It is best for internal control purposes to pay invoices by check.

The auditor should determine whether material long-term payables or non-trade payables require separate disclosure. Purchase Requisition The purchase requisition starts the purchasing cycle.

Do this for both the acquisitions and cash disbursements matrices. See pages — in Chapter 18 for transaction-related audit objectives for acquisitions and cash disbursements. The general approach to be taken will be to reduce assessed control risk to a low level, if possible, for the two main types of transactions affecting accounts payable: During a meeting with the facilities director, you learn that the board of directors has decided to raise a significant amount of debt to finance the construction of a new manufacturing plant for the Solar-Electro division.

The following are furnished as background information: Prepare a control risk matrix for acquisitions and a separate one for cash disbursements using Figure on page as a guide. Do this for both the acquisitions and cash disbursements matrices.

Identify key deficiencies for acquisitions and for cash disbursements. The requisitioning department should not have the authority to actually place the purchase order. Points of consideration is a Pinnacle VP owning Todd-Machinery, its repair men working at Pinnacle at the time the auditor was at field work, while standing in front of vending machine.

If the purchase order is canceled, all copies should be recalled and filed so that every purchase order number is accounted for. You also observe that new computerized manufacturing equipment has been installed at Solar-Electro. The general approach to be taken will be to reduce assessed control risk to a low level, if possible, for the two main types of transactions affecting accounts payable: Your team has been assigned the responsibility of auditing the acquisition and payment cycle and one related balance sheet account, accounts payable.

Familiarize yourself with the internal control system for acquisitions and cash disbursements by studying the information in Figure and Figure Thus, the receiving department is forced to count the goods upon arrival.

Pinnacle Manufacturing Case

The objectives should be specific transaction-related audit objectives for acquisitions for the first matrix and cash disbursements for the second matrix.

Familiarize yourself with the internal control system for acquisitions and cash disbursements by studying the information in Figure andFigure See pages — in Chapter 18 for transaction-related audit objectives for acquisitions and cash disbursements. Two requirements are to keep the current ratio above 2.

A member of your CPA firm, who is currently on-site in Detroit at the Welburn division, calls you to see how everything is going while you are visiting Solar-Electro in Texas.Integrated Case Application Part 3 In: Business and Management Submitted By kneeko1 Control Risk Matrix – Acquisitions | Pinnacle Manufacturing INTEGRATED CASE APPLICATION Conchata Rouse (a,b,and g) Adam Mouhaumd(c,d,e, and f) ACCT.

PINNACLE MANUFACTURING - Part III Control Risk Matrix – Acquisitions Transaction-Related Audit Objective Internal Controls* Recorded5/5(2).

PINNACLE MANUFACTURING - Part III Control Risk Matrix – Acquisitions Transaction-Related Audit Objective Internal Controls* Recorded. (Objective ) In Parts I and II of this case, you performed preliminary analytical procedures and assessed acceptable audit risk and inherent risk for Pinnacle Manufacturing.

Your team has been assigned the responsibility of auditing the acquisition and payment cycle and one related balance sheet account, accounts payable%(1). Damarys Vazquez PINNACLE MANUFACTURING - Part IV Following are control risk matrices and related notes that are used to direct a discussion of the requirements of the case.

It should be understood that judgment is a critical element in this case, Control Risk Matrix – Acquisitions. PINNACLE MANUFACTURING - Part III Control Risk Matrix – Acquisitions. Transaction-Related Audit Objective Recorded acquisitions are for goods and services received (occurrence).

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Pinnacle manufacturing control risk matrix
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