ExpertEasy1 markMultiple Choice
CPA · Question 18 · Area I: Information Systems
An auditor is testing a control that requires 'Three-way matching' before a payment is authorized. Which three documents must match?
An auditor is testing a control that requires 'Three-way matching' before a payment is authorized. Which three documents must match?
Answer options:
A.
Purchase Order, Receiving Report, Vendor Invoice
B.
Purchase Requisition, Purchase Order, Check Copy
C.
Vendor Invoice, Bank Statement, General Ledger
D.
Sales Order, Shipping Document, Sales Invoice
How to approach this question
Recall the standard expenditure cycle control.
Full Answer
A.Purchase Order, Receiving Report, Vendor Invoice✓ Correct
A
Three-way matching verifies that: 1. We ordered it (Purchase Order), 2. We received it (Receiving Report), and 3. The price is correct (Vendor Invoice). This prevents paying for goods not ordered or not received.
Common mistakes
Confusing the expenditure cycle (buying) with the revenue cycle (selling).
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