Flashcards in Deck 12 Deck (20):
Occurs when a check drawn on one bank is deposited in another bank and no record is made of the disbursement in the balance of the first bank. May result in high level of deposits with a low average balance
Immediately upon receiving checks from customers by mail, what must be done?
An employee must prepare a duplicate listing of the checks
The objective of auditing procedures applied to segment information is to provide the auditor with a reasonable basis for concluding whether:
The information is presented in conformity with the GAAP rules on segment information
Good internal control for cash includes:
The separation of cash handling, record keeping, and reconciliation of bank statements
Proper authorization for sales involves:
Obtaining credit approval before filling the order
Separation of duties between billing and cash receipts relates to:
Prevention of theft of cash
What is included in a security count worksheet?
- Record the details of the account
- An acknowledgment by a client representative that the securities were returned intact
If a client uses a stock transfer agent, confirmations should be used to provide evidence of:
Shares authorized, issued, and outstanding, as well as to provide evidence of the individual transactions.
Investment income from dividends is generally recalculated by
Comparing recorded income with dividend record books produced by investment advisory services such as "Moody's Dividend Record"
The auditor reviews repair and maintenance expense accounts to test for:
Completeness of asset additions
Data in two or more fields are checked for consistency
Where is the remittance list sent?
Forwarded to the cashier and have a copy sent to the accounts receivable clerk to update the subsidiary accounts receivable records
An employee uses current remittances to conceal remittances that have been stolen previously
What department matches the receiving report, purchase order, and vendor invoice?
The accounts payable department
Blank confirmations should be used if:
Recipients are likely to sign other positive confirmations without careful investigation
Three elements of Segregation of duties
R: record keeping
What assertion does credit approval deal with?
What kind of function is credit approval?
What kind of function is shipping?