5 Written questions
3 Matching questions
- 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.
- Voucher register (387)
- A local gas station has one clerk that accepts cash payments for gas and rings them up on the cash register. Which of the following would be the best control to provide assurance that the cashier isn't keeping some of the cash?A-Count all cash before and after the shift and compare it to cash register totals.B-Require that each customer be given a receipt of their purchase.C-Compare cash register totals to a total that is automatically generated by each gas pump.D-Require that each employees have a separate cash drawer that only they use.
- a D-Examine the voided checks file to determine whether the check is in the file.
- b ...
- c C-Compare cash register totals to a total that is automatically generated by each gas pump.
5 Multiple choice questions
- A-Several overpayments are made for goods received from a supplier.
- Financial instruments that "derive" their value from other financial instruments, underlying assets, or indexes. Examples are options, forward contracts, and futures contracts.
- D-A bank transfer schedule
- A-An unrecorded (on the books) deposit made at the beginning of the month; the amount was withdrawn late in the month, again with no book entry.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 True/False questions
A security owned by a company is from another company that recently declared bankruptcy. Which of the following is the auditor's primary concern with the investment? A-Existence B-Presentation C-Completeness D-Valuation → B-Checks dated prior to year-end to the outstanding checks listed on the year-end bank reconciliation.
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. → D-General ledger.
What of the following is the risk that is of most concern to auditors when auditing cash?A-Detective risk B-Inherent risk C-Adjunct risk D-Nonsampling risk → B-Inherent risk
Lockbox (384) → ...
Broker's advice (410) → A notification sent by a stockbrokerage firm to a customer reporting the terms of a purchase or sale of securities.