Common cause of discrepancies in confirmation replies

Assignment Help Financial Accounting

Reference no: EM131202321

1. For the risk of inaccurate recording of disbursements, what is the most likely internal control weakness?

Inadequate segregation of duties in accounts payable

Inadequate training for accounts payable employees

Ineffective controls for matching shipping documents

Ineffective controls for review of supporting documents

2. What is the most common cause of discrepancies in confirmation replies?

Error — incomplete form

Error — time lag

Fraud — collusion

Fraud — kiting

3. Which audit assertion is met when testing accounts payable to related parties?

Completeness

Existence

Presentation

Rights

4. For the risk of failing to record cash sales, what is the most likely internal control weakness?

Inadequate cash register security

Inadequate security of deposits

Ineffective segregation of duties

Ineffective register tape reconciliation

5. When a customer does not respond to a positive confirmation request, which auditor response would be incorrect?

Apply alternative procedures to accounts

No action if enough other responses were received

Send additional confirmations on similar accounts

Send second or third confirmation requests

6. Which of the following internal controls should be present over cash disbursement transactions?

Authorized, independent check signer

Electronic point-of-sale system

Financial institution lockbox

Segregation of sales clerk and cashier duties

Reference no: EM131202321

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