e$.$ You have been assigned to the year$-$end audit of a fi nancial institution and are planning the

timing of audit procedures relating to cash. You decide that it would be preferable to:

$(1)$ Count the cash in advance of the balance sheet date in order to disclose any kiting

operations at year$-$end.

$(2)$ Coordinate the count of cash with the cutoff of accounts payable.

$(3)$ Coordinate the count of cash with the count of marketable securities and other negotiable

assets.

$(4)$ Count the cash immediately upon the return of the confi rmation letters from the fi nancial

institution.

f$.$ Which of the following procedures would the auditors most likely perform to test controls

relating to management$$s assertion about the completeness of cash receipts for cash sales

at a retail outlet?

$(1)$ Observe the consistency of the employees$$ use of cash registers and tapes.

$(2)$ Inquire about employees$$ access to recorded but undeposited cash.

$(3)$ Trace deposits in the cash receipts journal to the cash balance in the general ledger.

$(4)$ Compare the cash balance in the general ledger with the bank confi rmation request.

g$.$ Reconciliation of the bank account should not be performed by an individual who also:

$(1)$ Processes cash disbursements.

$(2)$ Has custody of securities$.$

$(3)$ Prepares the cash budget.

$(4)$ Reviews inventory reports.

h$.$ The auditors suspect that a client$$s cashier is misappropriating cash receipts for personal

use by lapping customer checks received in the mail. In attempting to uncover this embezzlement

scheme, the auditors most likely would compare the:

$(1)$ Details of bank deposit slips with details of credits to customer accounts.

$(2)$ Daily cash summaries with the sums of the cash receipts journal entries.

$(3)$ Individual bank deposit slips with the details of the monthly bank statements.

$(4)$ Dates uncollectible accounts are authorized to be written off with the dates the writeoffs

are actually recorded.

i$.$ In order to guard against the misappropriation of company$-$owned marketable securities$,$

which of the following is the best course of action that can be taken by a company with a

large portfolio of marketable securities$?$

$(1)$ Require that one trustworthy and bonded employee be responsible for access to the

safekeeping area where securities are kept.

$(2)$ Require that employees who enter and leave the safekeeping area sign and record in a

log the exact reason for their access.

$(3)$ Require that employees involved in the safekeeping function maintain a subsidiary

control ledger for securities on a current basis.

$(4)$ Require that the safekeeping function for securities be assigned to a bank or stockbroker

that will act as a custodial agent.

j$.$ Hall Company had large amounts of funds to invest on a temporary basis. The board of

directors decided to purchase securities and derivatives and assigned the future purchase

and sale decisions to a responsible fi nancial executive. The best person or persons to make

periodic reviews of the investment activity would be:

$(1)$ An investment committee of the board of directors.

$(2)$ The chief operating offi cer.

$(3)$ The corporate controller.

$(4)$ The treasurer.

k$.$ The auditors who physically examine securities should insist that a client representative be

present in order to:

$(1)$ Detect fraudulent securities$.$

$(2)$ Lend authority to the auditors$$ directives.

$(3)$ Acknowledge the receipt of securities returned.

$(4)$ Coordinate the return of securities to the proper locations.

l$.$ The best way to verify the amounts of dividend revenue received during the year is:

$(1)$ Recomputation.

$(2)$ Verifi cation by reference to dividend record books.

$(3)$ Confi rmation with dividend$-$paying companies.

$(4)$ Examination of cash disbursements records