Exam 23: Audit of Cash and Financial Instruments

A partial-period bank statement and the related copies of or digital access to cancelled checks,duplicate deposit slips,and other documents included in bank statements,mailed by the bank directly to the CPA firm's office,is called

Factors that impact inherent risk of financial instruments do not include

An auditor is reviewing the minutes of board meetings to determine whether any securities are pledged as collateral.This test of the detail of balances relates to the audit objective of

When an auditor is verifying quoted market prices,they are concerned about the balance-related audit objective of accuracy.

When an audit client uses a service organization to manage their investment activity,

Only tests of details of cash balances are useful when auditors are specifically testing for fraud.

Which of the following is not a "cash equivalent"?

A proof of cash includes a reconciliation of cash receipts deposited in the bank with the cash disbursements records for a given period.

When assessing risks affecting cash,

Tests related to realizable value will vary according to the type of security and the associated accounting standard.

The transfer of money from one bank account to another and improperly recording the transfer so that the amount is recorded as an asset in both banks is referred to as kiting.

"Failure to bill a customer" is an example of an error that results in the failure to receive cash,but would not be discovered as part of the audit of the bank reconciliation.State three other examples of errors or irregularities that result in the improper payment of,or failure to receive,cash,but that would not be discovered during the audit of the bank reconciliation.How are these types of misstatements normally uncovered in the audit?

When auditing financial instruments,analytical procedures can be used to

A major consideration in the audit of the general cash balance is the possibility of fraud.The auditor must extend his or her procedures in the audit of year-end cash to determine the possibility of a material fraud when there are

The auditor uses a proof of cash to determine whether

The use of unobservable inputs such as a pricing model or discounted cash flow is an example of a level ________ estimate.

The starting point for testing the ending balance of financial instruments accounts is to obtain a gain or loss schedule for the year.

The bank reconciliation

Tests for kiting are performed using only a schedule of intrabank transfers.

To test the client's list of outstanding checks on the bank reconciliation for completeness,the auditor should trace from the list to the checks included with the cutoff bank statement.