acctg something
as a separate line item
a bank deposit that is restricted in use should be included:
standard confirmation form
a form designed to provide corroborating evidence about the client's account balances and outstanding loans is a
kiting
a fraudulent act that causes an amount of cash to be included in the balance of two or more bank accounts at the same time to conceal a cash shortage or meet short-term cash needs
charged to the proper account and supported by adequate vouchers
a large payment to an officer of the business should be verified to ensure it was:
standard confirmation
account balances are often verified with financial institutions using a _____________ form that addresses only the client's deposits and loan balances.
disclosed
agreements to maintain compensating balances should be ___________ in the financial statements
proof of cash
an audit procedure that reconciles the bank's record of cash activity with the client's accounting records for a test period is called a
a flowchart or written description of controls, assessment of risk for the financial statement assertions about cash, summarized test of controls for cash transactions
audit working papers for cash typically include:
auditors may substantiate other items that flow through cash, a company with poor internal controls over cash may be concealing fraud, cash is the most liquid of assets, and therefore inherent risk is high
auditors focus on cash because
cutoff
auditors verify deposits in transit as shown on the year-end bank reconciliation appear as credits on the bank statement on the first business day of the new year to verify proper _________ of cash receipts.
notes receivable, securities and other investments, cash funds
before verifying the client's cash on hand, auditors must establish control over:
dividend record books
dividends that should have been received and recorded can be computed by referring to ______________ published by investment and advisory services.
registered
internal control over the financial investments should require that securities are __________ in the name of the company
1. obtain an understanding of the internal control 2. assess the risk of material misstatement and design further audit procedures 3. perform test of controls for investment transactions 4. perform substantive procedures for investment transactions
steps for auditing financial statements
test the accuracy of the year-end reconcilliation
the auditors may ask the financial institutions for cutoff bank statements in order to:
general ledger
the auditors prepare a list of all the client's cash accounts and related information. this information is trached and reconciled to the __________.
overstated
the auditors should review cutoff bank statements for any paid checks issued on or before the balance sheet date but not listed as outstanding on the client's year-end bank reconciliation, in order to determine that the amount of cash shown on the balance sheet date was not:
balance sheet date
the petty cash funds and change funds may be counted at any time before of after the
checks were not mailed until after year end
unreasonable delays in the presentation for payment of checks listed as outstanding at year end implies:
proof of cash
when internal control over the recording of cash receipts and disbursements is considered weak, the auditors may prepare a _______, which reconciles cash transactions occurring during a specific period.