Final answer:
Auditors test key control procedures such as purchase orders, receiving reports, and vendor invoices in the client's purchasing transaction cycle to ensure effectiveness in preventing errors or fraud.
Step-by-step explanation:
When performing tests of controls, auditors may test the key control procedures in the client's purchasing transaction cycle including examination of purchase orders, receiving reports, and vendor invoices. It's important that auditors assess the effectiveness of these controls to prevent or detect errors or fraud in the purchasing process.
They may look at whether purchase orders are properly authorized, whether goods received are matched with purchase orders and invoices, and if payments are made only for goods or services actually received. Additionally, testing might include verification of competitive bidding, examination of supporting documentation, appropriate approvals, and timely recording of transactions.