MCQ AUD 4.2

Question 1

Negative confirmations

Answer 1

are used when the combined assessed level of inherent and control risk is low

Question 2

The best way to prevent direct labor hours charged to manufacturing overhead

Answer 2

use of time tickets to record actual labor hours worked on production orders

Question 3

kiting occurs

Answer 3

when a check drawn on one bank is deposited in another and no record is made of the disbursement in the balance of the first bank. Frequent kiting may result in high level of deposits coupled with low average balance.

Question 4

If there is a misappropriation or lapping of cash auditor should check

Answer 4

dates checks are deposited for bank statements with the dates remittance credits are recorded