Give two reasons audit work on cash is likely to be more extensive than might appear to be justified by the relative amount of the balance sheet figure for cash.
Answer to relevant Questions“If the auditors discover any evidence of employee fraud during their work on cash, they should extend their investigation as far as necessary to develop a complete set of facts, regard- less of whether the amounts ...During your reconciliation of bank accounts in an audit, you find that a number of checks for small amounts have been outstanding for more than a year. Does this situation call for any action by the auditor? Explain.In what ways can the audit of financial investments present special risks requiring specialized skill and knowledge?In the audit of Wheat, Inc., for the year ended December 31, you discover that the client had been drawing checks as creditors’ invoices became due but had not been mailing the checks immediately. Because of a working ...For each substantive procedure below, identify its primary objective or indicate that the procedure serves no purpose.Substantive Procedures:a. Prepare a bank transfer schedule.b. Prepare a four-column proof of cash.c. Use a ...
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