Exam 10: Auditing Cash and Marketable Securities

Smurfing 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 21

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

(Essay)

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Question 22

The standard bank confirmation includes a designated place for the financial institution to report which of the following?

(Multiple Choice)

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Question 23

Which of the following is a risk associated with complex financial instruments?

(Multiple Choice)

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Question 24

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

(Multiple Choice)

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Question 25

The primary purpose of the cutoff bank statement is to verify the reconciling items on the bank reconciliation.

(True/False)

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Question 26

The cutoff bank statement is used by the auditor to address which of the following concerns?

(Multiple Choice)

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Question 27

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

(True/False)

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Question 28

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

(Multiple Choice)

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Question 29

Which of the following would not be used as part of analytical procedures for marketable securities?

(Multiple Choice)

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Question 30

The existence of debt covenants with restrictions related to cash or working capital increase the risks of material misstatement in cash accounts.

(True/False)

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Question 31

Notes issued by major corporations are known as commercial paper.

(True/False)

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Question 32

Internal audits are seldom an effective deterrent to the theft of cash.

(True/False)

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Question 33

When auditing marketable securities,the auditor will do which of the following?

(Multiple Choice)

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Question 34

Which of the following types of financial instruments is a contract between a buyer and a seller in which the buyer has the right (but not the obligation)to buy an agreed quantity of a specified commodity or financial instrument at a certain time for a certain price.

(Multiple Choice)

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Question 35

Client management's review of monthly bank reconciliations prepared by employees is an example of a control over the accuracy of cash balances that the auditor might test.

(True/False)

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Question 36

Which of the following best describes kiting?

(Multiple Choice)

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Question 37

Bank confirmations There are two parts in a standard bank confirmation.Discuss the purposes and what would be requested by each part and to whom it would be sent.

(Essay)

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Question 38

Thinly traded securities have a greater inherent risk related to valuation.

(True/False)

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Question 39

Customer checks received at the client company should be restrictively endorsed within one week of receipt.

(True/False)

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Question 40

Showing 21 - 40 of 97

Smurfing 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.

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

The standard bank confirmation includes a designated place for the financial institution to report which of the following?

Which of the following is a risk associated with complex financial instruments?

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

The primary purpose of the cutoff bank statement is to verify the reconciling items on the bank reconciliation.

The cutoff bank statement is used by the auditor to address which of the following concerns?

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?

Which of the following would not be used as part of analytical procedures for marketable securities?

The existence of debt covenants with restrictions related to cash or working capital increase the risks of material misstatement in cash accounts.

Notes issued by major corporations are known as commercial paper.

Internal audits are seldom an effective deterrent to the theft of cash.

When auditing marketable securities,the auditor will do which of the following?

Which of the following types of financial instruments is a contract between a buyer and a seller in which the buyer has the right (but not the obligation)to buy an agreed quantity of a specified commodity or financial instrument at a certain time for a certain price.

Client management's review of monthly bank reconciliations prepared by employees is an example of a control over the accuracy of cash balances that the auditor might test.

Which of the following best describes kiting?

Bank confirmations There are two parts in a standard bank confirmation.Discuss the purposes and what would be requested by each part and to whom it would be sent.

Thinly traded securities have a greater inherent risk related to valuation.

Customer checks received at the client company should be restrictively endorsed within one week of receipt.

Quality Auditing: Why It Matters

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 Auditor

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

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 Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

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