Answered: Explain the relationships among the…

Explain the relationships among the initial assessed controlrisk, tests of controls and substantive tests of transactions for cash receipts, and the testsof details of cash balances.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments

Section: Chapter Questions

Problem 28CYBK

See similar textbooks

Related questions

Q: If you are going to audit the cash receipts cycle, what are the things you need to prepare?

A: Cash receipts cycle in the business means process or procedure which is being followed for receiving…

Q: nternal control procedures for cash receipts do not equire that:

A: Solution Introduction Internal control Internal control is the policies and systems that are put in…

Q: Which of the following is not an objective of the cash audit? determine that a. A long-term…

A: Objectives of Cash Audit One of the objectives for a cash audit is to verify that the recorded cash…

Q: Which of the following is not a basic characteristic of a system of cash control? Group of answer…

A: Every business organizations are required to implement the proper controls so as to avoid the theft…

Q: Define what is meant by internal control and describe some key elements of an internal control…

A: Internal Control: Internal control can be defined as a process to ensure achievement of the…

Q: eceipts and payments must be classified in the statement of cash flows as to whether they are from…

Q: ich of the following procedures would an auditor most likely perform to test trols relating to…

A: The given scenario relates with cash receipts. To check the authenticity of the transaction the…

Q: In what manner can cash receipts and cash disbursements be controlled?

A: Budget: A budget is an estimation to determine the income that will be earned and expenses that will…

Q: Describe the audit procedure for cash.

A: Step 1 Basically, cash is a very sensitive item and highly risky on which there is always a fear…

Q: Which of the following is the best audit procedure for the detection of lapping? a. Comparison of…

A: Lapping means deliberately misappropriation of the funds by the employee of the organization. When…

Q: What are the steps in approach to internal control over cash receipts that utilizes separation of…

A: Cash receipts are the payment that customer receives from the sales made. The Lock-box system is…

Q: This test of details of transactions for cash balances involves the counting of all undeposited cash…

A: Accounting is the process of recording, classifying, and summarizing accounting transactions. This…

Q: This test of details of transactions for cash balances involves the counting of all undeposited cash…

A: Accounting is the detailed process of recording, classifying, and summarizing accounting…

Q: What is the major purpose of an imprest petty cash fund? A. to effectively plan cash inflows and…

A: Imprest petty cash fund is cash balance with the petty cashiers for paying little business…

Q: List the transaction-related audit objectives for the verificationof cash receipts. For each…

A: Audit objectives for verification of cash receipts are- Recorded sales Database management…

Q: When auditing the cash account, the auditor traces the cash receipts, which are recorded on the cash…

A: Auditing refers to the process of physically evaluating and inspecting all the financial information…

Q: Is there a way to verify that cash equivalents are properly classified? If so, how would it fit into…

A: Cash Equivalents means any short-term investment securities with maturity periods of 90 days or…

Q: Six internal control principles related to cash transactions are discussed in the textbook. These…

A: Accounting principle: These are the guidelines which are to be applied while preparing the…

Q: A key internal control in the sales and collection cycle is the separation of duties between cash…

A: Internal control: Internal control refers to the process of checking by the management that the…

Q: Identify each of the following statements as either true or false. A guideline for safeguarding cash…

A: Internal controls are set of policies and procedures that are introduced in the organization to…

Q: Help

A: Internal control refers to the policies and plans of the business organization along with other…

Q: Which of the following statements are true regarding the control of cash receipts and cash payments?…

A: To control cash receipts and cash payments, Over-the-counter cash sales should be recorded on a cash…

Q: Identify important internal control activities present in a properly designed system to mitigate the…

A: Internal Control: A company’s Internal Control ensures that the operational efficiency of a company…

Q: Recognize when to extend audittests of the general cash accountto test further for material fraud.

A: Definition:

Q: Cash receipts should be deposited on the day of receipt or the following business day. Select the…

A: Comparing the daily cash receipts with the bank deposits will reveal the promptness of deposit of…

Q: a. Identify the internal control weaknesses in the cash receipts process b. For each weakness,…

A: Internal controls are the set procedures, and mechanisms implemented by the company for better and…

Q: related to cash? What are the most important assertions related to cash? How will auditors test…

A: Cash is a highly liquid asset held by a business firm at a point of time. It is recorded under the…

Q: Identify each of the following statements as either true or false. A voucher system of control is a…

Q: Which of the following statements are true regarding the control of cash receipts and cash payments?…

A: Cash receipts – When a payment is received in the form of cash, a company records cash receipts.…

Q: List several audit procedures that the auditor can use to determinewhether all cash received was…

A: Audit procedures are utilized by examiners to decide the nature of the money related data being…

Q: In preparing for the audit of cash, the auditors perform analytical procedures concerning cash…

Q: Which of the following is an effective internal control for cash payments? A.Payments should be…

A: Cash is one of the important current asset of the business. It's valuation and management is very…

Q: How do you asess the risk of material misstatement associated with the audit of cash?

A: The risk of material misstatement seems to be the result of a mix of inherent and control risks. In…

Q: he accounting clerk pays all obligations by pre numbered checks. What are the strengths and…

A: It was must obligatory in the internal control over the cash payments which are taken care of by the…

Q: amount of cash is accurately recorded on the financial statements. All of the following are…

A: an audit, independent examination of the financial statement of an entity. there are mainly three…

Q: Explain the relationships among the initial assessed controlrisk, tests of controls and substantive…

A: The cash account is affected by the transaction in most of the cycles. Since there is a relationship…

Q: List at least 5 control measures per principle of control activities which an organization may…

A: Internal control refers to the mechanism, rules and procedures of the company for preventing fraud,…

Q: di

A: Audit procedures are the processes, techniques, and methods that auditors perform to obtain audit…

Q: As part of a strong internal control system, which of the following accounting duties needsto be…

A: Internal control system: It can be defined as a structure consisting of the procedures, rules, and…

Q: Where in the cash receipts process does supervision play an important role?

Question

Explain the relationships among the initial assessed control
risk, tests of controls and substantive tests of transactions for cash receipts, and the tests
of details of cash balances.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Explain the relationships among the initial assessed controlrisk, tests of controls and substantive tests of transactions for cash disbursements, andthe tests of details of cash balances. Give one example in which the conclusions reachedabout internal controls in cash disbursements will affect the tests of cash balances
Which of the following is the best audit procedure for the detection of lapping? a. Comparison of postings of cash receipts to accounts with the details of cash deposits. b. Confirmation of the cash balance. c. Reconciliation of the cash account balances. d. Preparing a proof of cash.
List the transaction-related audit objectives for the verificationof cash receipts. For each objective, state one internal control that the client can use toreduce the likelihood of misstatements.
What are the internal controls that should be in place to ensure the accuracy and security of cash and cash equivalents?
Prepare a flowchart of a cash receipts procedures described in the problem.
If you are going to audit the cash receipts cycle, what are the things you need to prepare?
What is cash disbursement journal? Why it is useful to auditor in cash audit?
6) Identify and explain the techniques and methods to manage cash receipts and disbursements
6) Examine the cash receipts journal in the accounting system and compare the amounts received to the corresponding amounts invoiced in the revenue accounting system and to the bank statement evidencing the deposit. This is an example of which of the following? A) audit objective B) audit assertion C) audit procedure D) audit program
22) Use audit software to foot and crossfoot the cash disbursements journal and trace the balance to the general ledger. This is which of the following tests A) test of balances B) analytical procedure C) test of transactions D) test of control
When auditing the cash account, the auditor traces the cash receipts, which are recorded on the cash receipt journal but not on the current period bank statement, to subsequent bank statements. Which of the following audit objectives are tested? A. Classification and cut-off B. Completeness and occurrence C. Occurrence and cut-off D. Completeness and cut-off E. Classification and occurrence
Which of the following procedures is least likely to be performed before the balance-sheet date?a. Observation of inventory.b. Review of internal control over cash disbursements.c. Search for unrecorded liabilities.d. Confirmation of receivables.