A financial statement auditor concludes that internal controls over cash are not functioning as designed. She believes that material misstatements to the cash accounts are possible because of the deficiencies. What is the course of action that the auditor will most likely take? Group of answer choices Report the audit to the regulatory agencies of the IRS and SEC. Develop specific tests for cash balances to determine the extent of misstatement. Explain to the client that the audit firm will not be able to complete the audit. Test the internal control over cash.

Q: Which audit claims will be met by the audit method of cash count and bank verification requests

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A: Audit risk It is the risk that financial statements are materially incorrect, even though financial…

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Q: The following are various changes in audit circumstances. Audit Circumstance The client began…

A: Test of Details of Balance Auditors use this method to verify the details of individual transactions…

Q: The auditor would like to determine any cash restriction. Which of the following audit procedures…

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Q: Which of the following substantive audit procedures is most likely to be performed by the auditor to…

A: Substantive audit procedures refer to audit processes performed by the auditor to detect material…

Q: If an auditor believes that a misstatement might be intentional and the effect on the financial…

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Q: Which of the following procedures would provide the most reliable audit evidence?a. Inquiries of the…

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A: Answer:   Option 3.

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

A: Definition:

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A:

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.