Exam 11: The Revenues, Receivables, and Receipts Process and Cash Account Balance

Will the confirmation of accounts, loans, and notes receivable always provide sufficient appropriate audit evidence to cover the ownership assertion made by the client?

If an auditor selects a sample of customer accounts receivable and traces payment credits to remittance worksheets and bank deposits, the auditor is testing the control objective of completeness.

Which of the following audit procedures is most likely to detect lapping by the accounts receivable clerk?

Which of the following procedures is an auditor most likely to perform for year-end accounts receivable confirmations when the auditor did not receive replies to second requests?

A charity sells raffle tickets at community events. One ticket will be chosen to win a prize. The charity could reduce the risk of employee misappropriation of cash best by ________.

Which of the following controls helps to achieve the accuracy objective over sales invoices?

Tracing a sample of recorded cash receipts to the customers' accounts in the accounts receivable subsidiary ledger is an audit procedure designed to satisfy the control objective of ________.

An auditor should perform alternative procedures to substantiate the existence of accounts receivable when ________.

If it is impracticable to confirm accounts receivable but the auditor obtains sufficient, appropriate evidence to verify the receivable balance by performing alternative procedures, the auditor's opinion should be unqualified. The audit report should ________.

Auditors should consider the possibility of kiting if there are frequent deposits of round amounts.

The open (or pending) sales order file can be reviewed for evidence of the completeness of recorded sales.