Goods Invoiced and Recorded Purchase System (1)

Question 1

What is risk (goods received)

Answer 1

That the liability for goods received is not recognised in the accounting records

Question 2

What is control objectives (goods received)

Answer 2

Ensure that liabilities for goods received are recognised in accounting records

Question 3

What is controls (goods received) (passed)

Answer 3

Another part of GRN should be passed to accounts department

Question 4

What is controls (goods received) (invoices)

Answer 4

Invoices received from suppliers should then be matched to GRN

Question 5

What is controls (goods received) (accrual)

Answer 5

Unmatched GRNs should be received periodically and an accrual posted for associated liability

Question 6

What is tests of controls (goods received) (sample of GRNs)

Answer 6

For sample of GRNs trace through to corresponding invoice and verify that invoice has been recorded in the accounting records

Question 7

What is tests of controls (goods received) (accrual)

Answer 7

When no invoice has been received verify that the relevant accrual has been recorded

Question 8

What is risk (liability recognised)

Answer 8

That a liability is recognised for goods which have not been received

Question 9

What is control objectives (liability recognsied)

Answer 9

Ensure that a liability is only recognised for goods which have been received

Question 10

What is controls (liability recognsied)

Answer 10

Upon receipt of a supplier invoiced, it should be matched to sequentially numbered GRN and order form. Invoice should be allocated the same sequential number

Question 11

What is tests of controls (liability recognsied)

Answer 11

For a sample of invoices recorded, vouch details back to GRn and order form to verify that goods were received