5 Written Questions
5 Matching Questions
- Which of the following is confirmed on the standard form used for cash balances at financial institution? A-Factored accounts receivable B-Loss contingencies C-Loans payable D-Safe deposit boxes controlled by the entity
- Which of the following is most likely to indicate fraud? A-Several overpayments are made for goods received from a supplier. B-The year end cash balance does not include cash in transit to the company at year-end. C-A check received after year end was inadvertently recorded as if received before year-end. D-A documented loan to an officer of the company
- A four column bank reconciliation ("proof of cash") will generally assist an auditor in detecting: A-An unrecorded (on the books) deposit made at the beginning of the month; the amount was withdrawn late in the month, again with no book entry. B-A second payment of a liability that had already been paid in full. C-A check written and recorded on the books for $2,000, not $200 the amount of the actual liability. D-An embezzlement of a portion of the company's petty cash.
- Electronic funds transfer ETF (384)
- Of the following, which procedure or document is most effective for detecting kiting? A-A bank cutoff statement B-A bank reconciliation C-A bank kiting statement D-A bank transfer schedule
- a D-A bank transfer schedule
- b A-Several overpayments are made for goods received from a supplier.
- c ...
- d C-Loans payable
- e A-An unrecorded (on the books) deposit made at the beginning of the month; the amount was withdrawn late in the month, again with no book entry.
5 Multiple Choice Questions
- C-The Controller should have control of accounting functions and the Treasurer should have control of cash receipt functions.
- D-They may be sent electronically or non-electronically.
- D-Verify the company owns the security, check the accuracy of the accrual, and require no adjustment.
- A bank statement covering a specified number of business days (usually 7-10) after the client's balance sheet date. Auditors use this statment to determin the checks issued on or before the blance sheet date and paid during the cutoff period were listed as outstanding on the year-end bank reconciliation. Another use is to determin the reconciling items shown on the year-end bank reconciliation have cleared the bank within a reasonable amout of time.
5 True/False Questions
Jones embezzled $50,000 from his company's account in Bank A. At year-end he hid the shortage by making a deposit on December 31 in Bank A, drawn on Bank B. He has not recorded the transaction on the books. This is an example of: A-Lapping. B-Kiting. C-Effective cash management. D-Related party transactions. → B-Kiting.
Electronic data interchange EDI (384) → ...
Window dressing (402) → ...
Standard confirmation form (396) → ...
Broker's advice (410) → Financial instruments that "derive" their value from other financial instruments, underlying assets, or indexes. Examples are options, forward contracts, and futures contracts.