Exam 23: Audit of Cash and Financial Instruments

As part of their internal control procedures,management needs to have procedures in place to properly classify financial instruments as trading,available-for-sale,or held-to-maturity,based on

Because cash is the most desirable asset for people to steal,it has a higher

What should be audited on an interbank transfer schedule?

List two common tests of details of balances procedures the auditor would perform when testing for the balance-related audit objective of realizable value.

Instead of receiving a cutoff bank statement or if online access to client bank account information is not available to the auditor,auditors can wait until the subsequent period bank statement is available to verify reconciling items.Discuss the purpose of reviewing the subsequent period bank statement and list the verifications the auditor performs on this bank statement.

When the auditor sends a confirmation to the broker-dealer,they are testing the balance-related audit objective of

A proof of cash receipts is not useful for uncovering the theft of cash receipts or the recording and deposit of an improper amount of cash.

When auditing the general cash account,receipt of a standard bank confirmation is the starting point for verifying the company's general cash account balance.

Which of the following is not a correct statement regarding business risk and financial instruments?

Based on the schedule of interbank transfers above,which of the cash transfers indicates an error in cash cutoff at December 31,2015?

Determining if the financial instruments included in the schedule of investment activity at year-end are stated at appropriate amounts in accordance with accounting standards is the balance-related audit objective of

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

The audit procedure which requires the auditor to record the last check number used on the last day of the year and subsequently trace to the outstanding checks and the cash disbursements records is performed to satisfy the audit objective of

Which of the following is likely to be detected as part of the audit of the bank reconciliation?

If an auditor waits until the subsequent period bank statement is available to verify reconciling items,it is primarily a test for

If a bank does not respond to a bank confirmation request,the auditor would most likely

Which of the following balance-related audit objectives typically is assessed as having high inherent risk for cash?

The auditor needs to have an understanding of the client's internal controls over determining fair value estimates.

When dealing with financial instruments,the most difficult balance-related audit objective to test is

Which of the following items would not normally appear on bank reconciliations?