Exam 10: Auditing Cash and Marketable Securities

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Assume that an auditor notes a large series of checks that does not clear the bank for an unusually long time after period end. Which of the following would the auditor likely suspect from this observation?

(Multiple Choice)

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Question 61

An imprest payroll account should never reach a zero balance.

(True/False)

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Question 62

Auditors usually perform relatively limited substantive analytics for cash accounts and instead focus on substantive tests of details.

(True/False)

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Question 63

Which of the following situations would normally be discovered as part of the test of the bank reconciliation?

(Multiple Choice)

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Question 64

?When a lockbox is used, the financial institution records the deposit and then forwards customer transaction data to the client to update cash and accounts receivable records.

(True/False)

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Question 65

The existence or occurrence assertion as related to cash is concerned with proper classification on the balance sheet.

(True/False)

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Question 66

The auditor will send a standard bank confirmation to which of the following?

(Multiple Choice)

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Question 67

Kiting involves the overstatement of a bank account by transferring funds at the end of the year to another bank account and failing to record the disbursement.

(True/False)

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Question 68

The cutoff statement is mailed to the client for an agreed upon-date and then copied for the audit files.

(True/False)

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Question 69

Automated controls over cash eliminate the inherent risks associated with the cash account.

(True/False)

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Question 70

Which of the following controls over cash would an auditor expect to observe?

(Multiple Choice)

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Question 71

The auditor is responsible for auditing the necessary disclosures when material lines of credit and compensating balance arrangements have been made by the client with a lender.

(True/False)

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(76)

Question 72

The deposit of cash directly at the bank to speed collections often involves the use of a lockbox.

(True/False)

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Question 73

Which of the following best describes kiting?

(Multiple Choice)

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Question 74

Cut-off bank statements Explain what is meant by a cutoff bank statement, and discuss the purpose of the cutoff bank statement in the audit of cash.

(Essay)

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Question 75

Types of Controls. Identify the types of controls used to minimize potential misstatements of cash.

(Essay)

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Question 76

A company must do which of the following, if a company maintains a material compensating balance of cash?

(Multiple Choice)

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Question 77

The auditor prepares a schedule for marketable securities. Which of the following is not one of the items included related to the value of the securities?

(Multiple Choice)

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(83)

Question 78

Financial Statements Assertions. Describe the management assertions relevant to cash and other liquid assets.

(Essay)

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Question 79

Working capital may be tied to certain debt covenants causing cash to be considered significant for audit purposes.

(True/False)

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(90)

Question 80

Showing 61 - 80 of 101

Assume that an auditor notes a large series of checks that does not clear the bank for an unusually long time after period end. Which of the following would the auditor likely suspect from this observation?

An imprest payroll account should never reach a zero balance.

Auditors usually perform relatively limited substantive analytics for cash accounts and instead focus on substantive tests of details.

Which of the following situations would normally be discovered as part of the test of the bank reconciliation?

?When a lockbox is used, the financial institution records the deposit and then forwards customer transaction data to the client to update cash and accounts receivable records.

The existence or occurrence assertion as related to cash is concerned with proper classification on the balance sheet.

The auditor will send a standard bank confirmation to which of the following?

Kiting involves the overstatement of a bank account by transferring funds at the end of the year to another bank account and failing to record the disbursement.

The cutoff statement is mailed to the client for an agreed upon-date and then copied for the audit files.

Automated controls over cash eliminate the inherent risks associated with the cash account.

Which of the following controls over cash would an auditor expect to observe?

The auditor is responsible for auditing the necessary disclosures when material lines of credit and compensating balance arrangements have been made by the client with a lender.

The deposit of cash directly at the bank to speed collections often involves the use of a lockbox.

Which of the following best describes kiting?

Cut-off bank statements Explain what is meant by a cutoff bank statement, and discuss the purpose of the cutoff bank statement in the audit of cash.

Types of Controls. Identify the types of controls used to minimize potential misstatements of cash.

A company must do which of the following, if a company maintains a material compensating balance of cash?

The auditor prepares a schedule for marketable securities. Which of the following is not one of the items included related to the value of the securities?

Financial Statements Assertions. Describe the management assertions relevant to cash and other liquid assets.

Working capital may be tied to certain debt covenants causing cash to be considered significant for audit purposes.

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

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