QUESTION 13 (1) A junior auditor said: "Comparing to other accounts, such as property, plant and equipment and accounts receivable, cash account contains less inherent risk. This is because there is no significant valuation issue with cash." Evaluate the statement and justify your answer (2) Use the fraud triangle to explain why revenue recognition is generally considered as having high fraud risk. [

QUESTION 13 (1) A junior auditor said: "Comparing to other accounts, such as property, plant and equipment and accounts receivable, cash account contains less inherent risk. This is because there is no significant valuation issue with cash." Evaluate the statement and justify your answer (2) Use the fraud triangle to explain why revenue recognition is generally considered as having high fraud risk. [

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments

Section: Chapter Questions

Problem 5RQSC

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ZYNGA (LO Z 3, 4, 5, 6, 8) Refer to the Why It Matters feature “How to Account for Virtual Sales at Zynga.” a. What are the inherent risks associated with the revenue transactions at Zynga? b. What are management’s incentives to fraudulently misstate revenue transactions? c. What controls should Zynga management have in place to mitigate the risks associated with revenue transactions? d. How might auditors use planning analytical procedures to identify any potential concerns with Zynga’s revenue? e. What might be considered sufficient appropriate evidence when auditing Zynga’s revenue transactions?
hellooo, ito po yung ipapa-post ko: 1. Although the primary objective of an independent audit is not the discovery of fraud, the auditors in their work on cash take into consideration the high relative associated with this asset. One evidence of this attitude is evidenced by the CPAs alertness on signs of lapping. Define lapping and explain the audit procedures that CPAs might utilize to uncover lapping. 2. What actions should be taken by auditors when the count of cash on hand discloses shortage?
1. Although the primary objective of an independent audit is not the discovery of fraud, the auditors in their work on cash take into consideration the high relative associated with this asset. One evidence of this attitude is evidenced by the CPAs alertness on signs of lapping. Define lapping and explain the audit procedures that CPAs might utilize to uncover lapping. 2. What actions should be taken by auditors when the count of cash on hand discloses shortage?
Accounting 1. The auditor spends significant time auditing cash discounts and sales returns because A. management needs to authorize these transactions. B. these transactions reduce income. C. the materiality is higher. D. the risk of transactions being recorded to conceal stolen cash is higher.
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