Page 43 - eBook Audit Of Financial Statement Components

7. Banks are _________ for searching their records for bank

balances or loans beyond those included on the standard bank
confirmation form.
A Not required
B Responsible
C Not responsible
D Required

8. Which of the following procedures may uncover fraud in the cash
receipts area?
A Aging of receipts
B Tests to detect lapping
C Analytical
D None of the above

9. An auditor performs a proof of cash to verify that:
A All recorded cash receipts were deposited
B All amounts that were paid by the bank were recorded
C All deposits in the bank were recorded in the accounting records
D All of the above

10. _____________ is the transferring of money from one bank to
another and incorrectly recording the transaction.
A Flipping
B Kiting
C Frauding
D Dating

11. Auditing of the inventory cycle is simple in comparison to audits of
other cycles.
A True
B False

12. In a process cost system, costs are accumulated by individual jobs
when materials are issued and labor costs are incurred.
A True
B False

13. The periodic inventory master file is updated automatically when
acquisitions of inventory are processed as part of recording
acquisitions.
A True
B False

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