Page 23 - eBook Audit Of Financial Statement Components

14. If an auditor discovers shipments to non-existent customers that

are recorded as sales, this is an example of an error.
A True
B False

15. Deferring cash receipts of one customer to cover shortages of
another customer is an example of lapping of accounts receivable.
A True
B False

16. Making sure that customer's checks are restrictively endorsed is an
internal control to safe guard cash received.
A True
B False

17. A company's accountant should perform regular reconciles of the
company's bank accounts.
A True
B False

18. Inherent risk is usually set high by an auditor for the realizable
value of accounts receivable objectives.
A True
B False

(Adapted from: (Arens, 2021))

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