26312613
Description
Quiz by Kayla Harbaugh, updated more than 1 year ago
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Created by Kayla Harbaugh
over 3 years ago
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Question 1
Question
Which of the following assertions is relevant to whether the cash balances reflect the true underlying economic value of those assets?
Answer
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Existence/occurrence
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Completeness
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Rights and obligations
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Valuation or allocation
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All of these
Question 2
Question
Affirmative answers to which of the following questions would lead the auditor to assess fraud risk at a higher level for cash?
Answer
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Is an individual with access to cash or its recording experiencing financial or personal distress?
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Is an individual with access to cash or its recording being compensated at an amount that he or she might consider low?
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Is the company in potential violation of its debt covenants?
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Two of the three narrative answered choices given.
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All of these
Question 3
Question
The first step in performing planning analytical procedures is to develop an expectation of the account balance. Which of the following does not typically represent a likely expected relationship for cash accounts?
Answer
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The company reports consistent profits over several years, but operating cash flows are declining.
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No unusual large cash or other liquid asset transactions are found
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Operating cash flow is not significantly different from that of the prior year
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Investment income is consistent with the level of and returns expected from the investments
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All of these represent likely expected relationships
Question 4
Question
Refer to Exhibit 10.6. Which of the following represents a reasonable test of controls for cash receipts?
Answer
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Document internal controls over cash by completing the internal control questionnaire or by flowcharting the process
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Segregation of duties between those handling cash and those recording cash transactions.
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Obtain a bank confirmation
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Obtain a bank cutoff statement
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All of these
Question 5
Question
Refer to Exhibit 10.15. Which of the following assertions is relevant to the audit procedure for marketable securities that requires the auditor to examine selected documents to identify any restrictions on the securities?
Answer
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Existence/occurrence
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Completeness
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Rights and obligations
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Valuation or allocation
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All of these
Question 6
Question
A fake cash problem relates to management's cash valuation assertion.
Answer
- True
- False
Question 7
Question
Controls for completeness of cash are important because they help to provide reasonable assurance that the cash exists.
Answer
- True
- False
Question 8
Question
Because a primary concern is that cash will be stolen and thus understated, the auditor is not usually concerned about overstatements of cash.
Answer
- True
- False
Question 9
Question
Because of the level of inherent risk associated with cash accounts, auditors are required to test the controls over cash accounts.
Answer
- True
- False
Question 10
Question
When there is a ready market for financial instruments, the audit procedures related to valuation and disclosures are more straightforward than when the instrument is not readily marketable.
Answer
- True
- False
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