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Test of control for sequence checks

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Test of control for sequence checks

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Kim Smith.
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  • February 26, 2021 at 5:15 am #611734
    Anonymous
    Inactive
    • Topics: 40
    • Replies: 42
    • ☆☆

    Control is Orders should be sequentially prenumered and sequence checks shall be performed on weekly basis by senior responsible manager.
    What should be test of control for this?

    February 26, 2021 at 8:25 am #611761
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8325
    • ☆☆☆☆☆

    Your choices to consider are:

    Reperformance – if the sequence is broken but the missing items have been properly followed up, that will be evidence of the control having been performed by the responsible person. If missing items not followed up, the control has not been performed.
    The problem with this is that if the sequence is not broken, that does not evidence that the check was performed.

    Observation – as for any test of observation it will only confirm that the control was exercised on that occasion.

    Inspection of evidence of the control having been performed – this usually takes the form of approval signature (e.g. on a monthly payroll) or a stamp (e.g. “authorised” on an invoice) or other check mark. If gaps in the sequence of sales order are supposed to be cancelled orders, then perhaps there will be a file of cancelled orders that can be inspected.

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