Number 3 and 4 are incorrect

* Answer is complete but not entirely correct. Possible Misstatements Due to Errors and Fraud Auditing Procedure(s) 1. The auditor suspects that a kiting scheme exists because an accounting department employee who can issue and record checks seems to be leading an unusually luxurious F lifestyle. (Select only 1 procedure.) 2. An auditor suspects that the controller wrote several checks and recorded the cash disbursements just before year-end but did not mail the checks until after the first week of D the subsequent year. (Select only 1 procedure.) 3. The entity borrowed funds from a financial institution. Although the transaction was properly recorded, the auditor suspects that the loan created a lien on the entity's real G X estate that is not disclosed in its financial statements. (Select only 1 procedure.) 4. The auditor discovered an unusually large receivable from one of the entity's new customers. The auditor suspects that the receivable may be fictitious because the auditor has never heard of the customer and because the auditor's initial attempt to confirm the L, M X receivable has been ignored by the customer. (Select only 2 procedures.) 5. The auditor suspects that fictitious employees have been placed on the payroll by the entity's payroll supervisor, who has access to payroll records and to the paychecks. (Select P only 1 procedure.) 6. The auditor suspects that selected employees of the entity received unauthorized raises from the entity's payroll supervisor, who has access to payroll records. (Select only 1 procedure.) 7. 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 recorded the cash receipts in its books during the last week of the A year under audit. (Select only 1 procedure.) 8. The auditor suspects that vouchers were prepared and processed by an accounting department employee for merchandise that was neither ordered nor received by the entity. U (Select only 1 procedure.) 9. The details of invoices for equipment repairs were not clearly identified or explained to the accounting department employees. The auditor suspects that the bookkeeper B incorrectly recorded the repairs as fixed assets. (Select only 1 procedure.) 10. The auditor suspects that a lapping scheme exists because an accounting department employee who has access to cash receipts also maintains the accounts receivable ledger A. J and refuses to take any vacation or sick days. (Select only 2 procedures.) 11. 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 E account. (Select only 1 procedure.) 12. The auditor suspects that the entity's controller has overstated sales and accounts receivable by recording fictitious sales to regular customers in the entity's books. (Select J , L only 2 procedures.)