AUDIT OF CASH Flashcards
(2 cards)
The primary audit objective for cash is to establish that the balance is properly stated. This involves determining:
I. That cash on hand as shown in the general ledger is represented by currency and coins on hand
II. Ownership and proper accountabilities
III. That cash balances are available without
restrictions
A. YES,NO, NO
B. YES,YES,YES
C. YES,NO,YES
D. YES, YES, NO
B
- 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 ue to ensure that the amount of cash is accurately recorded on the company’s financial statements. The most appropriate audit procedures for the objective are
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, observe, and test cash receipts..
d. Review the organizational structure and functional responsibilities; verify the existence and describe protection procedures for unused checks, including security measures.
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