A financial statement auditor concludes that internal controls over cash are not functioning as designed. She believes that material misstatements to the cash accounts are possible because of the deficiencies. What is the course of action that the auditor will most likely take? Group of answer choices Report the audit to the regulatory agencies of the IRS and SEC. Develop specific tests for cash balances to determine the extent of misstatement. Explain to the client that the audit firm will not be able to complete the audit. Test the internal control over cash.

Q: The official receipt reports a higher amount of cash collected while the corresponding sales invoice…

A: Solution A lapping scheme is a fraudulent practice that involves altering accounts receivables to…

Q: -Identify the external source of audit evidences to reconcile the imbalance in the cash book and…

A: External source of audit evidences are collected by the auditor outside the client's organization.

Q: Complete the table with assertion, and recommended audit procedure that apply: Possible Assertion…

A: In the audit of cash, the inherent risk of cash is usually assessed as high risk because the nature…

Q: ect the control objective being tested by placing the correct letter in the blank. A. Existence B.…

A: Solution:- Given, Auditors are auditing the cash receipts for Great Wall Corporation. For each audit…

Q: 0.Which of the following items would normally be EXCLUDED from the amount to be reported as cash on…

A: Solution: Following items would normally be EXCLUDED from the amount to be reported as cash on a…

Q: ccounting 1. The auditor spends significant time auditing cash discounts and sales returns because…

A: Audit and duties of auditor : Audit is the internal and external check of the financial statements,…

Q: f the auditor believes that a misstatement is or might be intentional and the effect on the…

A: Auditor: The auditor is the professional person who is appointed to conduct the official scrutiny of…

Q: The auditor would like to determine any cash restriction. Which of the following audit procedures…

A: Budget audits or a third-party objective review and evaluation of a company's financial accounts are…

Q: Forensic Accounting: Assurance Engagement 1: Expenditure Analysis. Expenditureanalysis is used when…

A: Revenues from other areas include the leftover profits accounted in other (unknown) revenue heads

Q: Items a through frepresent the items that an auditor ordinarily would find on a client-prepared bank…

A: Bank Reconciliation Statement is a statement document that reconciles the difference in the cash…

Q: Which of the following would NOT be classified as cash? a. Company's post-dated checks b.…

A: Solution: "Company's post-dated checks" would NOT be classified as cash.

Q: Which of the following statements in relation to accounting for petty cash fund is false? Group of…

A: The petty cash fund maintains the cash balance for transactions such as stationery, or other minor…

Q: Quesion 1: The following are various potential misstatements due to errors or fraud (1 through 7),…

A: The audit procedures are the procedures through which the auditor acquire the audit evidence…

Q: How does cash control deficiencies affect the development of audit procedures for cash?

A: Auditor: An auditor is a person or a group of people who is responsible for conducting an audit of…

Q: In rendering cash count the auditor observed that one of the items being presented by the custodian…

A: Audit refers to the examination as well as investigation of the accounting records and the financial…

Q: Which of the following control objectives would be least likely be considered by the internal…

A: Option 1 This will be considered by the auditor in drafting the audit procedures as it can lead to…

Q: If an auditor believes that a misstatement might be intentional and the effect on the financial…

A: c) If the auditors prepare the procedure and if check whether the fraud have taken place or going to…

Q: One of the typical characteristics of management fraud isa. Falsification of documents in order to…

A: Management Fraud:   Management fraud is a kind of fraud that is committed intentionally by the…

Q: Which of the following would NOT be classified as cash?   a. Company's post-dated checks b.…

A: Cash is the current asset which is in the form of money or it is something equivalent to money. It…

Q: Counting cash and verifying bank reconciliation are basic substantive procedures and are not…

A: Counting cash and verifying bank reconciliation are basic substantive procedures andsame ia required…

Q: 1 essential part of the auditor's responsibility in auditing cash receipts is to identify…

A: Cash receipt refers to the evidence of purchase issued when the buyer of goods has paid in cash and…

Q: A good control system of cash receipts and payments will help the entity to. a. Decrease in Bank…

A: Book balance is the cash balance shown in the accounting records.

Q: fter completing a horizontal and vertical analysis of the Balance Sheet and Income Statement.…

A: Balance Sheet and Income Statement of the company: These are the financial statement of the company…

Q: the following data was gathered during one of the recent audits of Cash Disbursement Section. One of…

A: There are basic 4 elements of a finding under auditing. Condition- Description of the problem or…

Q: ISA 240 the Auditor’s responsibilities relating to Fraud in an audit of financial statements,…

A: As auditor there are two types of auditing one can be engaged in the practice, internal and external…

Q: Part II Preparing the bank reconciliation is considered to be an important step in the internal…

A: Bank Reconciliation Statement is the statement which shows the differences between the bank balance…

Q: 1. Assignment of responsibility 2. Segregation of duties 3. Documentation 4. Physical controls 5.…

A: Control Activities:- Activities that are performed by the management in order to control and…

Q: would help an auditor determine whether accounts payable have been misstated?     Examining…

A: Accounts payable (AP) is the sum owed to creditors and suppliers by a corporation (also referred to…

Q: When a petty cash fund is used, which of the following is true? A. Entries that include a credit to…

A: The petty cash fund is established to maintain the cash balance for the minor cash transactions of…

Q: Explain why each of the following combinations of tasks should or should not be separated to achieve…

A: Ethics: Business ethics refers to a set of moral codes and guidelines that governs corporate…

Q: PART II — INTERNAL CONTROL OVER CASH RECEIPTS AND DISBURSEMENTS   Six internal control principles…

A: Internal Control:-It is a process of ensuring the systematic workflow in the organization with the…

Q: QUESTION 13 (1) A junior auditor said: "Comparing to other accounts, such as property, plant and…

A: first of all we will need to know the definition of inherent risk. Inherent risk :- The…

Q: 55. According to GAM for NGAs, the establishment of a petty cash fund Requires the approval of the…

A: Petty cash funds are those funds which are established for the purpose of small petty expenses in…

Q: Question 23 Which of the following statements is correct regarding accounts payable and the…

A: Find your answer below:

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.