Describe, in general terms, the audit procedures you would follow in making sure that cutoff for purchases is accurate at the balance sheet date.

The Broughton Cap Company requires that prenumbered receiving reports be completed when purchased inventory items arrive in the receiving department. At the time of receipt, the receiving clerk writes the date of receipt on the receiving document. The last receipt in the fiscal year ended June 30, 2019, was recorded on receiving report 7280. The accounts payable department prepares prenumbered voucher packages as receiving reports are received from the receiving department. Entries in the acquisitions journal are prepared using information contained in the voucher package.
For late June 2019 and early July 2019, receipts of goods are included in voucher packages
as follows:
Receiving Report No. Voucher No. Receiving Report No. Voucher No.
7276 2528 7280 2531
7277 2526 7281 2529
7278 2527 7282 2532
7279 2530 7283 2533
Required
Required
Chapter 18 / AUDIT OF THE ACQUISITION AND PAYMENT CYCLE 645
The June 2019 and July 2019 acquisitions journals included the following information:
Acquisitions Journal–June 2019
Day of Month Voucher No. Amount of Purchase
29 2526 $17,256.22
29 2527 $23,466.10
30 2528 $18,221.89
30 2529 $31,980.44
Acquisitions Journal–July 2019
Day of Month Voucher No. Amount of Purchase
1 2530 $15,001.99
1 2531 $24,888.33
2 2532 $11,933.74
2 2533 $26,459.19
a. Which voucher packages, if any, are recorded in the wrong accounting period?
Prepare an adjusting entry to correct the financial statements for the year ended June
30, 2019. Assume Broughton uses a perpetual inventory system and all purchases are
inventory items.
b. Assume the receiving clerk accidentally wrote June 30 on receiving reports 7281
through 7283. Explain how that will affect the correctness of the financial statements.
How will you, as an auditor, discover that error?
c. Describe, in general terms, the audit procedures you would follow in making sure
that cutoff for purchases is accurate at the balance sheet date.
d. Identify internal controls that will reduce the likelihood of cutoff misstatements re-
lated to purchases.

Last Completed Projects