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  • Substantive Test Cash and Cash Equivalents Quiz

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    Marie
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    The document discusses substantive audit procedures related to cash and cash equivalents. It covers topics such as: 1) The focus of a typical cash audit is the general cash account. 2) Footing the outstanding check list and deposits in transit helps satisfy the audit objective of completeness. 3) The payroll and personnel cycle does not affect cash in bank. 4) Footing the reconciliation and agreeing it to the general ledger can test that cash in bank is correctly stated. Bank confirmations are not always required but may be obtained at the auditor's discretion.

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    The document discusses substantive audit procedures related to cash and cash equivalents. It covers topics such as: 1) The focus of a typical cash audit is the general cash account. 2) Footing the outstanding check list and deposits in transit helps satisfy the audit objective of completeness. 3) The payroll and personnel cycle does not affect cash in bank. 4) Footing the reconciliation and agreeing it to the general ledger can test that cash in bank is correctly stated. Bank confirmations are not always required but may be obtained at the auditor's discretion.

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    1K views2 pages

    Substantive Test Cash and Cash Equivalents Quiz

    Uploaded by

    Marie
    The document discusses substantive audit procedures related to cash and cash equivalents. It covers topics such as: 1) The focus of a typical cash audit is the general cash account. 2) Footing the outstanding check list and deposits in transit helps satisfy the audit objective of completeness. 3) The payroll and personnel cycle does not affect cash in bank. 4) Footing the reconciliation and agreeing it to the general ledger can test that cash in bank is correctly stated. Bank confirmations are not always required but may be obtained at the auditor's discretion.

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    © All Rights Reserved
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    Substantive Test Cash and Cash Equivalents d.

    Auditing standards do not require bank


    confirmations except when there are an
    1. Which of the following is the focus of an unusually large number of
    audit of cash for most companies? inactive bank accounts.
    a. General cash account. D
    b. Payroll cash account.
    c. Petty cash account. 6. Which of the following statements is correct?
    d. Money market account. a. Bank personnel are responsible for providing
    A reasonable assurance that a response to a bank
    confirmation is accurate.
    2. The test of details of balances procedure that b. Bank personnel are responsible for providing
    requires the auditor to foot the outstanding complete assurance that a bank confirmation is
    check list and deposits in transit is an attempt complete.
    to satisfy which audit objective? c. Bank personnel are not responsible for
    a. Cutoff. searching their records for bank balances or
    b. Presentation and disclosure. loans beyond
    c. Detail tie-in. those included on the bank confirmation.
    d. Completeness. d. Bank personnel are not responsible for
    C providing information related to interest on the
    bank
    3. Which of the following cycles does not affect confirmation.
    cash in bank? C
    a. Capital acquisitions cycle.
    b. Inventory and warehousing. 7. The general cash account is considered
    c. Payroll and personnel cycle. significant in almost all audits:
    d. Acquisitions and disbursements. a. where the ending balance is material.
    B b. even when the ending balance is immaterial.
    c. except those of not-for- profit organizations.
    4. The audit objective of determining that cash d. where either the beginning or ending balance
    in bank, as stated on the reconciliation, foots is material.
    correctly and agrees with the general ledger can B
    be tested by which of the following procedures?
    a. Performing tests for kiting. 8. Which of the following errors would be least
    b. Receiving and testing a cutoff bank likely to be discovered during the audit of the
    statement. acquisitions and
    c. Footing the outstanding checks list and the payments cycle?
    list of deposits in transit. a. Duplicate payment of a vendor's invoice.
    d. Examining the minutes of the board of b. Improper payments of officers' personal
    directors for restrictions on the use of cash. expenditures.
    C c. Payment of interest to a related party for an
    amount in excess of the going rate.
    5. Which of the following statements is correct? d. Payment for raw materials that were not
    a. Auditors must obtain bank confirmations on received.
    every audit. C
    b. Auditors obtain bank confirmations at their
    discretion. 9. Testing the reasonableness of the cash
    c. Auditing standards do not address specific balance at year-end is less important when the
    requirements regarding bank confirmations. year-end bank reconciliation is
    verified:
    a. on a 100% basis.
    b. by someone in client's organization who is
    independent of the treasurer's function.
    c. by someone in client's organization who is
    independent of the controller's function.
    d. by the owner/manager.

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