1. The general cash account is considered a significant account in almost all audits A. Where the ending balance is material B. Even when the ending balance is immaterial C. Except those of not-for-profit organizations D. Where either the beginning or ending balance is material
MULTIPLE CHOICE:
1. The general cash account is considered a significant account in almost all audits
A. Where the ending balance is material
B. Even when the ending balance is immaterial
C. Except those of not-for-profit organizations
D. Where either the beginning or ending balance is material
2. The primary audit objective for cash is to establish that the balance is properly stated. This involves determining :
|
|
A |
B |
C |
D |
|
That cash on hand as shown in the general ledger is represented by currency and coins on hand |
YES |
YES |
YES |
YES |
|
Ownership and proper accountabilities |
YES |
NO |
NO |
YES |
|
That cash balances are available without restrictions |
YES |
NO |
YES |
NO |
An auditor for a large service company is performing an audit of the company’s cash balance. The auditor is considering the most appropriate audit procedure to use to ensure that the amount of cash is accurately recorded on the company’s financial statements. The most appropriate
A. Examine bank reconciliations, confirm bank balances and verify cut off of receipts and disbursements ; foot totals of reconciliations and compare to cash account balances
B. Review collection procedures and perform an analytical review of accounts receivable; confirm balances of accounts receivable ; and verify the existence of appropriate procedures and facilities
C. Compare cash receipt lists with the receipts journal and bank deposit slips ; review the segregation of duties and observe and test cash receipts
D. Review the organizational structure and functional responsibilities; verify existence and describe protection procedures for unused checks, including security measures
4. The starting point for the verification of the balance in the general bank account is to obtain:
A. The client’s year-end bank statement
B. The client’s cash account from the general ledger
C. A bank reconciliation from the client
D. A cutoff bank statement directly form the bank
5. Which of the following substantive audit procedures is most likely to be performed by the auditor to gather evidence in support of the balance per bank ?
A. Compare to general ledger
B. Trace to cash receipts journal
C. Confirm directly to bank
D. Trace items on the cut-off bank statement to bank reconciliation
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