Which of the following controls represent a control over cash that is unique to cash accounts?

Which of the following controls represent a control over cash that is unique to cash accounts?

a. Separation of duties.
b. Restrictive endorsements of customer checks.
c. Periodic internal audits.
d. Competent, well-trained employees.










Answer: B

Which of the following terms best defines this scenario? The employee steals a payment from Customer X. To cover the theft, the employee applies a payment from Customer Y to Customer X's account. Before Customer Y has time to notice that its account has not been properly credited, the employee applies a payment from Customer Z to Customer Y's account.

Which of the following terms best defines this scenario? The employee steals a payment from Customer X. To cover the theft, the employee applies a payment from Customer Y to Customer X's account. Before Customer Y has time to notice that its account has not been properly credited, the employee applies a payment from Customer Z to Customer Y's account.

a. Skimming.
b. Kiting.
c. Collateralizing.
d. Lapping.








Answer: D

Affirmative answers to which of the following questions would lead the auditor to assess fraud risk at a higher level for cash or other liquid assets?

Affirmative answers to which of the following questions would lead the auditor to assess fraud risk at a higher level for cash or other liquid assets?

a. Is an individual with access to cash or its recording experiencing financial or personal distress?
b. Is an individual with access to cash or its recording being compensated at amount that he or she might consider low?
c. Is the company in potential violation of its debt covenants?
d. Is cash physically available to employees?
e. All of the above.








Answer: E

Which of the following questions would be relevant for an inherent risk analysis questionnaire related to cash?

Which of the following questions would be relevant for an inherent risk analysis questionnaire related to cash?

a. Does the company have significant cash flow problems in meeting its current obligations on a timely basis?
b. Are cash transactions properly authorized?
c. Are bank reconciliations performed on a timely basis by personnel independent of processing?
d. Does the internal audit department conduct timely reviews of the cash management and cash handling process?
e. All of the above.








Answer: A