Exam 16: Auditing the Financinginvesting Process: Cash and Investments

When there is a large number of negotiable securities in multiple locations,careful planning of the physical inspection and count of the securities by the auditor is necessary to guard against

An imprest cash account is used for specific purposes and generally maintains a very small balance.

Auditors will need to perform more substantive tests than normal to obtain sufficient appropriate evidence that a financial instrument is fairly stated if which of the following conditions exist?

A major control that directly affects the audit of cash is the bank reconciliation prepared by the auditor.

In establishing the existence and ownership of a long-term investment in stock of a publicly traded company,an auditor should inspect the securities or

It is generally more efficient to follow a substantive strategy for auditing investments.

Examining a sample of cancelled checks for an authorized signature tests which of the following assertions for cash?

Which of the following pairs of accounts would an auditor most likely analyze on the same working paper?

Explain how cash plays a role in all business processes.

The general cash account is normally the principal account used to disburse payroll.

In a manufacturing company,which one of the following audit procedures would give the least assurance for the existence of the general ledger balance of investment in stocks and bonds at the audit date?

The first step in auditing petty cash is to gain an understanding of the entity's controls over petty cash.Describe some important controls an entity should have over its petty cash fund.

For each assertion about cash listed below,give an example of a test of transactions for (1)cash receipts and (2)cash disbursements. a.Classification. b.Occurrence. c.Authorization. d.Completeness.

What are the factors that must be considered to determine if a permanent decline in the value of an investment security has occurred?

The auditor should ordinarily mail confirmation requests to all banks with which the entity has conducted any business during the year,regardless of the year-end balance,since

Which of the following audit procedures is the most appropriate when internal control over cash is weak or when an entity requests an investigation of cash transactions?

Which of the following procedures would be most important in the audit of an investment valued at fair value?

Which of the following controls would a company most likely use to safeguard marketable securities when an independent trust agent is not employed?

A company holds bearer bonds as a short-term investment.Responsibility for custody of these bonds and submission of coupons for collections of periodic interest probably should be delegated to the

An interbank transfer schedule