Auditing and Assurance Services, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134075754
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Chapter 14, Problem 11RQ
To determine
State the transaction-related audit objective for the verification of cash receipts. Also, list one internal control which can be used by the client to decrease the likelihood of misstatements.
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List the transaction-related audit objectives for the verificationof cash receipts. For each objective, state one internal control that the client can use toreduce the likelihood of misstatements.
Consider the following internal controls associated with an evaluated receipts process.
For each control, identify the assertion for which the control is designed to prevent, or detect and correct misstatements.
a.
b.
C.
d.
e.
f.
g.
h.
Software generates a daily report comparing the daily total in the cash
disbursements journal with the total of payables submitted to the third-party
payment processor for payment, and discrepancies are reported.
Software generates a daily report of any discrepancies between the vendor
accounting coding and general ledger accounts coding, which is compared
with the purchase order and purchase requisition.
Software generates a daily report of any discrepancies between the recorded
payable and quantities on the receiving report. Once a receiving report is
matched with a purchase, it cannot be matched with another purchase.
Software generates a daily report of receiving reports that have not been
matched one-for-one with the recording of a purchase and a…
Identify important internal control activities present in a properly designed system to mitigate the risk of material misstatements for each relevant assertion related to cash and to help prevent or detect employee fraud.
Chapter 14 Solutions
Auditing and Assurance Services, Student Value Edition (16th Edition)
Ch. 14 - Describe the following documents and records and...Ch. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Prob. 9RQCh. 14 - Prob. 10RQ
Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Prob. 16RQCh. 14 - Prob. 17RQCh. 14 - Prob. 18RQCh. 14 - Prob. 19.3MCQCh. 14 - Prob. 19.1MCQCh. 14 - Prob. 19.2MCQCh. 14 - Prob. 20.1MCQCh. 14 - Prob. 20.2MCQCh. 14 - Prob. 20.3MCQCh. 14 - An auditor is performing substantive tests of...Ch. 14 - Prob. 21.2MCQCh. 14 - Prob. 22.1MCQCh. 14 - Prob. 22.2MCQCh. 14 - Prob. 22.3MCQCh. 14 - Prob. 23DQPCh. 14 - Prob. 24DQPCh. 14 - Prob. 25DQPCh. 14 - Prob. 26DQPCh. 14 - Prob. 27DQPCh. 14 - Prob. 28DQPCh. 14 - Prob. 29DQPCh. 14 - Prob. 30DQPCh. 14 - Prob. 31DQPCh. 14 - Prob. 32DQPCh. 14 - Prob. 33DQPCh. 14 - Prob. 34CCh. 14 - Prob. 35ICA
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- List the transaction-related audit objectives for the audit of salestransactions. For each objective, state one internal control that the client can use toreduce the likelihood of misstatementsarrow_forwardWhich of the following is the best audit procedure for the detection of lapping? Â a. Comparison of postings of cash receipts to accounts with the details of cash deposits. b. Confirmation of the cash balance. c. Reconciliation of the cash account balances. d. Preparing a proof of cash.arrow_forwardFor each procedure, indicate the primary audit objective being satisfied: Trace entries from cash receipts journal to entry in accounts receivable master file. O Occurrence O Completeness - transactions O Timing O Posting and summarization O Existence O Completeness - balances O Cutoff O Detail tie-in Realizable valuearrow_forward
- Which type of evidence is considered more reliable and relevant by the auditor? accounts receivable confirmation O minutes from management meetings O internally generated evidence O copy of cash receiptarrow_forward22) Use audit software to foot and crossfoot the cash disbursements journal and trace the balance to the general ledger. This is which of the following tests                A) test of balances              B) analytical procedure   C) test of transactions        D) test of controlarrow_forwardA key internal control in the sales and collection cycle is the separation of duties between cash handling and record keeping. The audit objective most directly associated with this control is to verify that:  a. Cash receipts recorded in the cash receipts journal are reasonable. b. Cash receipts are properly classified. c. Recorded cash receipts result from legitimate transactions. d. All cash receipts are recorded.arrow_forward
- 22) Use audit software to foot and cross foot the cash disbursements journal and trace the balance to the general ledger. This is which of the following tests A) test of balances B) analytical procedure C) test of transactions D) test of controlarrow_forwardAn auditor wishes to perform tests of controls on a client's cash disbursements procedures. If the control activities leave evidence, the auditor most likely will test the activities by Multiple Choice confirmation and observation. inquiry and analytical procedures. observation and inquiry. analytical procedures and confirmation. 13arrow_forwardIf you are going to audit the cash receipts cycle, what are the things you need to prepare?arrow_forward
- When auditing the cash account, the auditor traces the cash receipts, which are recorded on the cash receipt journal but not on the current period bank statement, to subsequent bank statements. Which of the following audit objectives are tested?  A. Classification and cut-off  B. Completeness and occurrence  C. Occurrence and cut-off  D. Completeness and cut-off  E. Classification and occurrencearrow_forwardExplain the relationships among the initial assessed controlrisk, tests of controls and substantive tests of transactions for cash receipts, and the testsof details of cash balances.arrow_forwardCite one one transaction-related audit objective for each of the following transactions: 1. acquisitions 2. cash disbursements For each objective, identify a. one key internal control activity, and b. one audit procedure to test the controlarrow_forward
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