Clara and David are working on the audit of Treadway Enterprises, and are meeting to discuss the client's internal controls over the cash disbursements process. Which of the following statements most accurately describes the controls that should be in place for this function? O Before payment of any cash disbursements, the appropriate authorizations should be received, and the correct dollar amounts paid. O Before the audit client proceeds with any cash disbursements, the firm should have appropriate entity-level controls in place to ensure transactional accuracy. O As part of the cash disbursement cycle, the auditor is likely to examine a sample of receivables controls to ensure their effectiveness. None of these answer choices are correct
Clara and David are working on the audit of Treadway Enterprises, and are meeting to discuss the client's internal controls over the cash disbursements process. Which of the following statements most accurately describes the controls that should be in place for this function? O Before payment of any cash disbursements, the appropriate authorizations should be received, and the correct dollar amounts paid. O Before the audit client proceeds with any cash disbursements, the firm should have appropriate entity-level controls in place to ensure transactional accuracy. O As part of the cash disbursement cycle, the auditor is likely to examine a sample of receivables controls to ensure their effectiveness. None of these answer choices are correct
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Clara and David are working on the audit of Treadway Enterprises, and are meeting to discuss the client's internal controls: specifically
controls over the cash disbursements process. Which of the following statements most accurately describes the controls that should
be in place for this function?
O Before payment of any cash disbursements, the appropriate authorizations should be received, and the correct dollar
amounts paid.
O Before the audit client proceeds with any cash disbursements, the firm should have appropriate entity-level controls in
place to ensure transactional accuracy.
O As part of the cash disbursement cycle, the auditor is likely to examine a sample of receivables controls to ensure their
effectiveness.
O None of these answer choices are correct.
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