The Specific Risk Analysis (SRA) work-papers used for the review of the operating cycle "Other Expenses" include a review of:

Question

Options

• Athe documentation, purchase approvals, and invoices that support recording a liability
• Bthe account distribution procedures when recording a liability or signing a check
• Cprocedures for reporting isolated events to accounting personnel for approval
• DAll of the above

• A
  8% (2)
• B
  4% (1)
• C
  4% (1)
• D
  84% (21)

Explanation

Option D is correct because a thorough SRA review of "Other Expenses" is not limited to a single control area - it must encompass the full liability recording and payment cycle. Option A alone is insufficient because verifying invoices and approvals only covers the front end of the process; without B, you cannot confirm that expenses are coded to the right accounts or that check-signing controls exist. Option B alone misses the upstream documentation trail that Option A provides, leaving no way to substantiate what is being distributed. Option C alone addresses only edge cases and would ignore the routine controls covered by A and B. Together, all three areas form a complete picture: source documentation (A), processing controls (B), and exception reporting (C).

Memory tip: Think of "Other Expenses" SRA as covering the full life of a transaction - before (approvals and invoices), during (account coding and check authorization), and after (reporting unusual items). Any answer that covers only one phase is automatically incomplete, so when you see "All of the above" on a comprehensive-controls question, check whether each option addresses a distinct phase of the same cycle - if they do, D is almost always correct.

No community discussion yet for this question.