Exam 18: Auditing Investments and

The substantive testing of investments does not ordinarily employ analytical procedures.

Kiting is possible when the same individual can issue and record checks.

Investing in marketable securities interfaces with the:

The nature of cash balances and the ability to obtain confirmations from banks minimize inherent risk for most cash balance assertions, especially existence or occurrence and completeness.

Consider the following financial statement assertions: -Confirm securities held by others. _____

The confirmation of bank deposit and loan balances with banks provides evidence for which of the following assertions? Existence or Rights and Valuation or Presentation Occurrence Completeness Obligations Allocation or Disclosure A) $\quad$ $\quad$ 4 $\quad$ $\quad$ $\quad$$\quad$ $\quad$ $\quad$ 4 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 4 B) $\quad$ $\quad$ 4 $\quad$ $\quad$ $\quad$$\quad$ $\quad$ $\quad$ 4 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 4 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 4 C) $\quad$ $\quad$ 4 $\quad$ $\quad$ $\quad$$\quad$ $\quad$ $\quad$ 4 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\quad\quad \quad\quad \quad \quad \quad \quad \quad$ 4 D) $\quad$ $\quad$$\quad$ $\quad$ $\quad$$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad \quad \quad$ 4 $\quad$ $\quad$ $\quad$ $\quad \quad\quad$ 4 $\quad\quad \quad \quad \quad$ 4

Information concerning other arrangements with banks is usually obtained from the client's banks in separate communications. This information is likely to include:

Common documents and records relating to the investing cycle would not ordinarily include:

During the count of cash on hand, it is not necessary for the auditor to:

Authorization for the purchase and sale of marketable securities should be found in the minutes the audit committee meetings.

Which of the following is correct concerning the inspecting and counting of securities on hand?

The auditor is most likely to review the client's bank reconciliation when the acceptable level of detection risk is:

Analyzing ratio results relative to expectations based on prior year, budgeted, or other data relates to:

The performance of cash cutoff tests provides evidence for which of the following assertions?

Bank transfers may result in a misstatement of the bank balance per books if the disbursement and receipt are not recorded in the same journal.

Consider the following financial statement assertions: -Confirm bank deposit and loan balances with banks. _____

The fact that the quantity of transactions affecting cash are greater than any other account in the financial statements relates to control risk.

Evidence of kiting is least likely to come from:

The primary source document for recording investing transactions is the:

A surprise confirmation of accounts receivable at an interim date is useful when the auditor suspects: