Question 1

The valuation/allocation and completeness assertions are usually the most relevant for auditing cash.

Accepted Answer

A) True 
 B)False

Question 2

In auditing cash accounts,auditors typically focus primarily on the existence/occurrence and completeness assertions.

Accepted Answer

A) True 
 B)False

Question 3

The emphasis in verifying petty cash is normally on which of the following?

Accepted Answer

A) Year-end balance. 
B) Controls over petty cash. 
C) Transactions for the period. 
D) Balance sheet classification. 
A) Year-end balance. 
B) Controls over petty cash. 
C) Transactions for the period. 
D) Balance sheet classification.

Question 4

When there is a ready market for a financial instrument,the audit procedures related to valuation and disclosures are more straightforward than when the instrument is not readily marketable.

Accepted Answer

A) True 
 B)False

Question 5

Which one of the following is not a fundamental internal control the auditor would expect to find in place for a cash processing system?

Accepted Answer

A) Segregation of duties. 
B) Electronic payments. 
C) Authorization of transactions. 
D) Periodic internal audits. 
A) Segregation of duties. 
B) Electronic payments. 
C) Authorization of transactions. 
D) Periodic internal audits.

Question 6

The standard bank confirmation should be sent to all banks used by the client during the year except those banks holding client accounts with a zero balance at year-end.

Accepted Answer

A) True 
 B)False

Question 7

Cutoff statement What is a bank cutoff statement and how is it used by an auditor?

Accepted Answer

The bank cutoff statement is a bank stat

Question 8

When auditing financial hedges,the auditor should understand the product,identify relevant risks and controls,and understand the appropriate accounting.

Accepted Answer

A) True 
 B)False

Question 9

Electronic funds transfers have controls built into the process and do not require further reconciliation by the client.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

The five management assertions relevant

Question 11

Which of the following would not be included as part of the documentation related to the substantive procedures for marketable securities?

Accepted Answer

A) A schedule of marketable securities prepared by the client. 
B) Reports of any outside valuation experts. 
C) Calculation of any potential impairments. 
D) Policies over purchase or sale of marketable securities. 
A) A schedule of marketable securities prepared by the client. 
B) Reports of any outside valuation experts. 
C) Calculation of any potential impairments. 
D) Policies over purchase or sale of marketable securities.

Question 12

Which assertion related to investments is tested when the auditor examines the documents for any restrictions?

Accepted Answer

A) Existence. 
B) Rights. 
C) Completeness. 
D) Valuation. 
A) Existence. 
B) Rights. 
C) Completeness. 
D) Valuation.

Question 13

Money laundering is designed to create the appearance that large sums of cash obtained from criminal activities,such as drug trafficking,originated from legitimate business sources.

Accepted Answer

A) True 
 B)False

Question 14

What form of evidence is used by the auditor to verify bank reconciliation items?

Accepted Answer

A) Cash counting observation. 
B) General ledger. 
C) Bank confirmation 
D) Cutoff statement. 
A) Cash counting observation. 
B) General ledger. 
C) Bank confirmation 
D) Cutoff statement.

Question 15

The valuation assertion is most relevant to the audit of marketable securities.

Accepted Answer

A) True 
 B)False

Question 16

The auditor's performance of an independent reconciliation of the client's bank accounts provides evidence as to the rights and obligations of the year-end cash balances.

Accepted Answer

A) True 
 B)False

Question 17

The ending price of securities can be verified through reliable publications and websites such as the Wall Street Journal.

Accepted Answer

A) True 
 B)False

The valuation/allocation and completeness assertions are usually the most relevant for auditing cash.

In auditing cash accounts,auditors typically focus primarily on the existence/occurrence and completeness assertions.

The emphasis in verifying petty cash is normally on which of the following?

When there is a ready market for a financial instrument,the audit procedures related to valuation and disclosures are more straightforward than when the instrument is not readily marketable.

Which one of the following is not a fundamental internal control the auditor would expect to find in place for a cash processing system?

The standard bank confirmation should be sent to all banks used by the client during the year except those banks holding client accounts with a zero balance at year-end.

Cutoff statement What is a bank cutoff statement and how is it used by an auditor?

When auditing financial hedges,the auditor should understand the product,identify relevant risks and controls,and understand the appropriate accounting.

Electronic funds transfers have controls built into the process and do not require further reconciliation by the client.

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

Which of the following would not be included as part of the documentation related to the substantive procedures for marketable securities?

Which assertion related to investments is tested when the auditor examines the documents for any restrictions?

Money laundering is designed to create the appearance that large sums of cash obtained from criminal activities,such as drug trafficking,originated from legitimate business sources.

What form of evidence is used by the auditor to verify bank reconciliation items?

The valuation assertion is most relevant to the audit of marketable securities.

The auditor's performance of an independent reconciliation of the client's bank accounts provides evidence as to the rights and obligations of the year-end cash balances.

The ending price of securities can be verified through reliable publications and websites such as the Wall Street Journal.

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

Filters

Exam 10: Auditing Cash and Marketable Securities

The valuation/allocation and completeness assertions are usually the most relevant for auditing cash.

In auditing cash accounts,auditors typically focus primarily on the existence/occurrence and completeness assertions.

The emphasis in verifying petty cash is normally on which of the following?

When there is a ready market for a financial instrument,the audit procedures related to valuation and disclosures are more straightforward than when the instrument is not readily marketable.

Which one of the following is not a fundamental internal control the auditor would expect to find in place for a cash processing system?

The standard bank confirmation should be sent to all banks used by the client during the year except those banks holding client accounts with a zero balance at year-end.

Cutoff statement What is a bank cutoff statement and how is it used by an auditor?

When auditing financial hedges,the auditor should understand the product,identify relevant risks and controls,and understand the appropriate accounting.

Electronic funds transfers have controls built into the process and do not require further reconciliation by the client.

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

Which of the following would not be included as part of the documentation related to the substantive procedures for marketable securities?

Which assertion related to investments is tested when the auditor examines the documents for any restrictions?

Money laundering is designed to create the appearance that large sums of cash obtained from criminal activities,such as drug trafficking,originated from legitimate business sources.

What form of evidence is used by the auditor to verify bank reconciliation items?

The valuation assertion is most relevant to the audit of marketable securities.

The auditor's performance of an independent reconciliation of the client's bank accounts provides evidence as to the rights and obligations of the year-end cash balances.

The ending price of securities can be verified through reliable publications and websites such as the Wall Street Journal.

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

Filters