Exam 18: Auditing Investments and

Which of the following would not be included in the current asset section of the balance sheet?

Verification procedures for investment income is least likely to include:

Tests to detect lapping are only performed when control risk for cash receipts transactions is moderate or low.

Indicate the substantive tests for cash balances that pertain directly to bank statements. For each test, identify the assertions to which it pertains.

The date of the bank cutoff statement is usually seven to ten days preceding the balance sheet date.

Consider the following financial statement assertions: -Perform cash cutoff tests. _____

Which of the following would not normally be done by the auditor in connection with the bank cutoff statement?

When material in amount, a bank overdraft should be treated as a:

An entity's investments pertain to the activities relating to the ownership of securities issued by the entity.

Consider the following financial statement assertions: -Confirm other arrangements with banks. _____

Consider the following financial statement assertions: -Count undeposited cash on hand and determine that such amounts are included in cash balances. _____

The specific audit objective, recorded cash balances exist at the balance sheet date, is derived from the:

Consider the following financial statement assertions: -Perform analytical procedures on investment balances.

The use of bank cutoff statements to verify bank reconciliation items, detect any unrecorded checks that have cleared the bank, and look for evidence of window dressing provides evidence for which of the following assertions for cash in bank? Existence or Rights and Valuation or Presentation Occurrence Completeness Obligations Allocation or Disclosure A) $\quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad\quad\quad$ 4 B) $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad\quad\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4 C) $\quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad\quad\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4 D) $\quad$$\quad$ 4 $\quad$$\quad$$\quad \quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 4

Bank confirmation requests should be mailed to all banks in which the client has an account, except those with zero balances at year-end.

Consider the following financial statement assertions: -Inspect and count securities on hand. _____

Misappropriation of assets is always present when an employee is involved with:

In confirming bank deposits, the auditor need not:

When detection risk for an assertion in the cash area is low, the auditor may perform all relevant tests at an interim date or well after year-end.

Which of the following bank transfers appears to be an example of kiting aimed at overstating the cash position at year-end? $\quad$$\text { Date of }$$\quad$$\quad$$\quad\quad$$\text {Date of}$ $\quad$$\text { Disbursement }$$\quad$$\quad$$\quad$$\text {Receipt }$ Books Books Books Books A) 12/28 1/03 12/28 12/28 B) 1/03 1/05 1/03 1/03 C) 12/30 1/03 12/30 12/30 D) 1/02 1/04 12/30 12/30 E) 1/03 1/05 1/03 12/31