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- Recall your study of selected financial audit reports of banks.a. Give two risks associated with banking activities and discuss their audit significance. b. Identify 2 unique accounts or accounting practices particular to banks. Describe briefly.How would you tell the difference between financial audits and forensic accounting, fraud auditing, and investigative auditing?Discuss the audit considerations arising from a bank’s extensive dependence on technology-based systems to process transactions. Cite specific example to prove your point.
- 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. confirm directly with bank b. compare to general ledger c. trace to cash receipts journal d. trace items on the cutoff bank statement to bank reconciliation e. all of the choicesWhy do GAGAS require a review for compliance with laws and regulations in conjunction with financial audits?When auditing contingent liabilities, which of the following procedures would be MOST effective? a. Reviewing the allowance for doubtful accounts. b. Reviewing the bank cutoff statement. c. Examining customer confirmation replies. d. Examining invoices for repairs expense. e. Abstracting the minutes of the board of directors.
- On receiving the bank cutoff statement, the auditor should trace:Explain the objective ofconducting an audit of financialstatements and an audit ofinternal controls.Which of the following control objectives would be least likely be considered by the internal auditors in drafting the audit procedures for bank accounts and banking arrangement activities under the Acquire-to-Retire process? To ensure that fund transfers and automated methods of effecting banking transactions are valid and verified, in the best interests of the organization, and authorized. A. To ensure that banking charges are effectively monitored and minimized. B. To ensure that all income from bank is recorded without delay. C.To ensure that all banking transactions are bona fide, accurate and authorized whenever necessary. D. To ensure that overdraft set facilities are authorized and correctly operated within the limits defined by management and the organization's bankers. E. To ensure that the potential for staff malpractice and fraud are minimized. F. To ensure that banking arrangements and facilities are sufficient, appropriate and adequate for the business.
- Typically, banks require potential company borrowers to provide audited financial accounts with their loan application. Why should financial statements be audited by a certified public accountant?What are the risks associated with auditing accounts payable? Can you explain the process of auditing accounts payable using confirmations.GIven the situation that you are an auditor of GZ Company and you were asked to provide the following(s): a. Explain the audit objectives for the management assertion of Bank, Cash, Inventories, Revenue and Payment. b. Explain 5 Audit procedures used in the process of acquiring evidence to test the management assertion for Bank, Cash, Inventories, Revenue and Payment.
