Exam 17: Audit of Cash Balances

Certain types of misstatements that affect cash may be detected in the audit of tests of controls.Which of the following misstatements would be detected in the audit of the sales and collection cycle?

What audit procedures are used to uncover a fraud in the cash receipts area?

Which of the following misstatements in the payroll cycle could be detected during the audit of payroll transactions (but would not be discovered as part of the audit of the bank reconciliation)?

A)Discuss the methodology for designing tests of details of balances for cash in the bank.B)An effective monthly bank reconciliation by client personnel includes nine procedures.List these nine bank reconciliation procedures.C)Discuss two analytical procedures commonly performed during the audit of the cash account.

The general cash account is considered significant in almost all audits

A partial-period bank statement and the related cancelled cheques,duplicate deposit slips,and other documents included in bank statements,mailed by the bank directly to the public accounting firm's office,is called a

The starting point for the verification of the balance in the general bank account is to obtain

In an effort to satisfy the completeness objective,the auditor could perform which of the following test of details of balance procedures?

The reason for testing the client's bank reconciliation is to verify whether the client's recorded bank balance is the same amount as the actual cash in the bank,except for deposits in transit,cheques outstanding,and other reconciling items.The information needed to complete the tests of the reconciliation are provided by the

What is the best way to prevent potential alteration,deletion,or addition of cancelled cheques,duplicate deposit slips,or other documents provided with the bank statement?

Which of the following is a common analytical procedure that may detect misstatements in cash?

Serena is the assistant controller of Opus Inc.As a result of a recent expansion,the controller has been very busy and delegated the signing authority for cheques to Serena.Further,due to the cash accountant leaving on maternity leave,Serena was asked to perform the bank reconciliation until they found someone to replace the cash accountant. Serena is a qualified accountant and has been able to handle all of these additional tasks.However,she asked her boss for a raise to compensate her for the additional responsibilities that she currently has.Her boss indicated that this was only temporary and the company could not afford a raise for now. Serena created a vendor in the system with her home address.She has been paying this vendor $2000 for the past 3 months as a means of compensating herself.This theft has yet to be discovered by Opus. Required: A)What internal controls are missing that enable the theft to occur? B)What audit procedures might detect the theft?

The test of details for cash balances procedure that requires the auditor to trace the unadjusted book balance on the reconciliation to the general ledger is an attempt to satisfy the audit objective of

When are short-term investments that are readily converted to cash included in the cash account in the financial statements?

Toasted Tomato is a restaurant in Ottawa.You walk by this restaurant frequently and noticed it is usually empty.When you came in to do the audit,you were surprised to see that they had a large cash balance and high sales.Toasted Tomato might

A significant part of the total audit that relates to cash is the audit of

During his examination of a January 19,2019 cutoff bank statement,an auditor noticed that the majority of cheques listed as outstanding at December 31,2018 had not cleared the bank.This would indicate

Which of the following audit tests pertains to the accuracy assertion?

What audit objective is associated with the comparison of disbursement and receipt information on a bank transfer schedule to the cash disbursements and cash receipts journals?

During the audit of cash,the focus of the audit is to