Alright back to work
An entity's internal control requires for every check request that there be an approved voucher, supported by a prenumbered purchase order and a prenumbered receiving report. To determine whether checks are being issued for unauthorized expenditures, an auditor most likely would select items for testing from the population of all:
A. Canceled Checks — CORRECT
B. Approved Vouchers
C. Receiving Reports
D. Purchase Orders
I didn't think any of these answers sounded good but went with C. I don't understand how a canceled check proves unauthorized transactions. Are they saying the check was canceled in the system but may actually still be a live check? Otherwise, if it's canceled (i took this the same as voided) then its irrelevant the check was voided the expense has been reverse no issues. At least with a receiving report there is a chance something was ordered and received in that actually didn't go through the approval process. But I guess that's ruled out because the question is specifically stating that they are looking for supporting documentation with PO's, RECEIVING REPORTS, and Approved vouchers, so just by eliminating those I suppose it gets you to the answer…still can't make sense of a canceled check proving anything
FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16
.