The following questions concern auditing year-end cash and financial instruments. Choose the best response. a. Which of the following controls would most likely detect a kiting scheme? (1) Preparing a bank reconciliation (2) Using a lockbox system for customer receipts (3) Comparing the details of deposit tickets and recorded remittance advices (4) Preparing a bank […]
McNeil Company, a medium-sized manufacturer of microwave ovens, has been an audit client for the past five years. McNeil Co. has been steadily growing and recently hired a new CEO, who has decided to increase the level of investments in financial instruments as a way of generating a profit from excess cash from operations. The […]
The following audit procedures are concerned with tests of details of general cash and financial instruments balances: 1. Obtain a standard bank confirmation from each bank with which the client does business. 2. Compare the balance on the bank reconciliation obtained from the client with the bank confirmation. 3. Trace deposits in transit on the […]
1. Explain why an auditor compares the “date of deposit according to the books” to the “date of disbursement according to the books” on an interbank transfer schedule to detect kiting. 2. Briefly explain why accounting standards related to fair value estimates make the audit of financial instruments more complex
AUDIT OF CASH AND FINANCIAL INSTRUMENTS Identify the major types of cash and financial instruments accounts maintained bybusiness entities.Show the relationship of cash in the bank to the various transaction cycles.Design and perform audit tests of the general cash account.Recognize when to extend audit tests of the general cash account to test further for material […]
The following questions concern auditing year-end cash and financial instruments. Choose the best response. a. Which of the following controls would most likely detect a kiting scheme? (1) Preparing a bank reconciliation (2) Using a lockbox system for customer receipts (3) Comparing the details of deposit tickets and recorded remittance advices (4) Preparing a bank […]
The following questions deal with auditing year-end cash and financial instruments. Choose the best response. a. A CPA obtains a January 10 cutoff bank statement for a client directly from the bank. Very few of the outstanding checks listed on the client’s December 31 bank reconcili- ation cleared during the cutoff period. A probable cause […]
TYPES OF CASH AND FINANCIAL INSTRUMENTS ACCOUNTS Identify the major types of cash and financial instruments accounts maintained by business entities.
AUDIT OF CASH AND FINANCIAL INSTRUMENTS Identify the major types of cash and financial instruments accounts maintained bybusiness entities.Show the relationship of cash in the bank to the various transaction cycles.Design and perform audit tests of the general cash account.Recognize when to extend audit tests of the general cash account to test further for material […]
The following questions deal with auditing year-end cash and financial instruments. Choose the best response. a. A CPA obtains a January 10 cutoff bank statement for a client directly from the bank. Very few of the outstanding checks listed on the client’s December 31 bank reconcili- ation cleared during the cutoff period. A probable cause […]
