5 Written questions
4 Matching questions
- It is most likely to be efficient to test the controls over financial investments when:A-Controls are thought to be weak. B-Substantive tests may be performed. C-Analytical procedures are possible. D-The company trades or holds a large number of securities.
- Voucher register (387)
- A primary use by the auditor of a bank cutoff statement is to compare: A-Bank service charges on the cutoff statement to deposits in the cash receipts journal. B-Checks dated prior to year-end to the outstanding checks listed on the year-end bank reconciliation. C-Deposits listed on the cutoff statement to disbursements in the cash disbursements journal. D-Checks dated subsequent to year-end to the outstanding checks listed on the year-end bank reconciliation.
- Which of the following is correct concerning cash confirmation requests? A-They ask for information on kiting activities. B-They should be sent quarterly by the auditors to financial institutions the client has accounts with. C-They should be sent by the client to financial institutions the client has accounts with. D-They may be sent electronically or non-electronically.
- a ...
- b B-Checks dated prior to year-end to the outstanding checks listed on the year-end bank reconciliation.
- c D-They may be sent electronically or non-electronically.
- d A-Controls are thought to be weak.
5 Multiple choice questions
- C-Compare cash register totals to a total that is automatically generated by each gas pump.
- A notification sent by a stockbrokerage firm to a customer reporting the terms of a purchase or sale of securities.
5 True/False questions
The accounting functions and the cash receipts functions should be handled by which department(s)? A-Both functions should be under the control of the company Treasurer B-Both functions should be under the control of the company Controller C-The Controller should have control of accounting functions and the Treasurer should have control of cash receipt functions. D-The Treasurer should have control of accounting functions and the Controller should have control of cash receipt functions. → This act allows financial institutions to creat and process electronic "substitute checks" in place of customer written hard-copy checks. The purpose of this act is to drease the time for check clearing.
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 → C-Loans payable
A company owns a large amount of debt securities that pay interest twice a year - August 1 and February 1. On the financial statements the company accrued the 5 months of interest it was due as interest receivable. The auditor should: A-Require the accrual be reversed since the interest has not yet been paid. B-Confirm the interest accrual with the security issuer. C-Require the accrual be reversed since the company could sell the security before interest has been paid. D-Verify the company owns the security, check the accuracy of the accrual, and require no adjustment. → D-Verify the company owns the security, check the accuracy of the accrual, and require no adjustment.
Lockbox (384) → ...
An auditor examining check disbursements discovered a missing check number. Upon inquiry to the person responsible for disbursements and reconciliation of the cash account, she is told that the check number is missing because the check was voided. What is the auditor's next step? A-Prepare a bank transfer schedule at to identify the check. B-Examine the bank confirmation to determine whether the check cleared. C-Since the person responsible for disbursements also reconciles the account, no additional procedures are necessary. D-Examine the voided checks file to determine whether the check is in the file. → D-Examine the voided checks file to determine whether the check is in the file.