ACCT 220 - Week 8 - Professional Report

MULTIPLE CHOICE: 4. An auditor who is engaged to examine the financial statements of a business entity will request cutoff bank statement primarily in order to: A. Detect lapping B. Detect kiting C. Verify reconciling items on the client’s bank reconciliation D. Verify the cash balance reported on the bank confirmation inquiry form 5. Which of the following auditing procedures would the auditor not apply to a cutoff bank statement? A. Trace year end outstanding checks and deposits in transit to the cutoff bank statement B. Reconcile the bank account as of the end of the cutoff period C. Compare dates, payees and endorsements on returned checks with the cash disbursements record D. Determine that the year-end deposit in transit was credited by the bank on the first working day of the following accounting period.

please answer with reason

MULTIPLE CHOICE: 1. An auditor ordinarily sends a standard confirmation request to all banks with which the client has done business during the year under audit, regardless of the year-end balance. A purpose of this procedure to A. request a cutoff bank statements and related checks be sent to the auditor B. Detect kiting activities that may otherwise not be discovered C. Seek information about contingent liabilities and security agreements D. Provide the data necessary to prepare proof of cash 2. As one of the year-end audit procedures , the auditor instructed the client’s personnel to prepare a standard bank confirmation request for a bank account that had been closed during the year. After the client’s treasurer had signed the request , it was mailed by the assistant treasurer. What is the major flaw in this audit procedure? A. The request was mailed by the assistant treasurer B. The CPA did not sign the confirmation request before it was mailed C. Sending the request was…

4. The starting point for the verification of the balance in the general bank account is to obtain: A. The client’s year-end bank statement B. The client’s cash account from the general ledger C. A bank reconciliation from the client D. A cutoff bank statement directly form the bank 5. Which of the following substantive audit procedures is most likely to be performed by the auditor to gather evidence in support of the balance per bank ? A. Compare to general ledger B. Trace to cash receipts journal C. Confirm directly to bank D. Trace items on the cut-off bank statement to bank reconciliation

PROBLEM 2 You are revisiting the audit working paper presented to you by your audit staff in line with his audit procedures done in auditing T-ara Corporation’s accounts receivable. The following were lifted from the said working papers:   Audit notes: T-ara Corporation’s accounts receivable subsidiary ledger had the following details: Customers Invoice Date Invoice Amount Balance Park Ji-yeon Inc. 12/06/22 127,000     10/29/22 84,000   211,000         Hyomin Company 12/30/22 42,000     09/27/22 30,000     08/20/22 53,520   125,520         Hahn Eunjung Inc. 12/30/22 40,000     12/08/22 80,000     11/25/22 63,600   183,600         Park So-yeon Company 11/17/22 138,840     10/09/22 132,000     08/20/22 74,400   345,240         Jeon Boram Corporation 12/10/22 250,000   250,000         Qri Incorporated 09/12/22 104,400   104,400 Total     1,219,760   The…

Which type of evidence is considered more reliable and relevant by the auditor? accounts receivable confirmation O minutes from management meetings O internally generated evidence O copy of cash receipt

Items a through frepresent the items that an auditor ordinarily would find on a client-prepared bank reconciliation. The accompanying List of Auditing Procedures represents substantive auditing procedures. For each item, select one or more procedures, as indicated, that the auditor most likely would perform to gather evidence in support of that item. The procedures on the list may be selected once, more than once, or not at all. Assume • The client prepared the bank reconciliation on 10/2/X5. • The bank reconciliation is mathematically accurate. • The auditor received a cutoff bank statement dated 10/7/X5 directly from the bank on 10/11/X5. • The 9/30/X5 deposit in transit-outstanding checks # 1281, #1285, # 1289, and #1292-and the correction of the error regarding check # 1282 appeared on the cutoff bank statement. • The auditor assessed control risk concerning the financial statement assertions related to cash at the maximum. A. Trace to cash receipts journal. B. C. D. E. F. G. H.…

1. What would the bank have to prove to successfully bring a lawsuit against K and Lee?

Balance owed Cashier Company Compensating balance Cutoff bank statements Dividend records Liquid assets Mail room Safe deposit box Signed

Bank Reconciliation: Ensuring Financial Accuracy and Integrity   Bank reconciliation is a vital accounting process that ensures the accuracy and integrity of an organization's financial records by comparing its internal financial records with the information provided by the bank. This practice is essential for detecting discrepancies, errors, or fraudulent activities that may occur during the financial transactions between the organization and the bank.   Key Components of Bank Reconciliation:   Starting Balance: The process begins with the starting balance, which represents the closing balance from the previous reconciliation.   Adding and Deducting Transactions: Both the organization and the bank maintain records of transactions, including deposits, withdrawals, checks issued, and other related activities. Bank reconciliation involves adding deposits in transit and deducting outstanding checks to reconcile the discrepancies.   Bank Fees and Interest: Bank statements often…

Which of the following substantive audit procedures is most likely to be performed by the auditor to gather evidence in support of the balance per bank? a. confirm directly with bank b. compare to general ledger c. trace to cash receipts journal d. trace items on the cutoff bank statement to bank reconciliation e. all of the choices

In the audit of a client with a fiscal year ending December 31, the CPAs obtain a January 10 bank statement directly from the bank. Explain how this cutoff bank statement will be used a. In the review of the December 31 bank reconciliation.b. To obtain other audit information.

Quesion 1: The following are various potential misstatements due to errors or fraud (1 through 7), and a list of auditing procedures (a. through h.) the auditor would con- sider performing to gather evidence to determine whether the error or fraud is present possible Misstatements Due to errors or Fraud 1. The auditor suspects that a lapping scheme exists because an accounting department employee who has access to cash receipts also maintains the accounts receivable led- ger and refuses to take any vacation or sick days. 2. The auditor suspects that the entity is inappropriately increasing the cash reported on its balance sheet by drawing a check on one account and not recording it as an outstanding check on that account and simultaneously recording it as a deposit in a second account. 3. The entity’s cash receipts of the first few days of the subsequent year were properly deposited in its general operating account after the year-end. However, the auditor suspects that the entity…

Question 21 The auditing cash is an important audit function. Provide four audit procedures that are most often applied when auditing a client's year-end bank reconciliation.