5 Written questions
5 Matching 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
- Dividend record book (410)
- 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
- 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.
- 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.
- a A reference book published monthly by investment advisory services reporting detailed information concerning all listed and many unlisted securities; includes dividend dates and amounts, current prices of securities, and other condensed financial data.
- b D-Valuation
- c C-Loans payable
- d D-Examine the voided checks file to determine whether the check is in the file.
- e C-Compare cash register totals to a total that is automatically generated by each gas pump.
5 Multiple choice questions
- B-Inherent risk
5 True/False questions
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an auditor in detecting: A-An unrecorded (on the books) deposit made at the beginning of the month; the amount was withdrawn late in the month, again with no book entry.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. → 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.
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. → C-The Controller should have control of accounting functions and the Treasurer should have control of cash receipt functions.
To gather evidence regarding the balance per bank on a bank reconciliation, an auditor could examine all of the following except: A-Cutoff bank statement. B-Year-end bank statement. C-Bank confirmation. D-General ledger. → B-Inherent risk
Voucher register (387) → ...
Electronic data interchange EDI (384) → 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.