SOLVED

14) In planning the audit, an auditor takes 3 basic steps in determining the audit procedures to be performed for any business cycle or class of transactions in order to gather audit evidence concerning possible misstatement due to error or fraud. List those three basic steps below. 15) The most difficult type of cash embezzlement for the auditor to detect is when the cash is stolen before it can be recorded in the cash receipts journal. A) True B) False 16) The most important audit concern in the processing and recording cash receipts function is not tracing the cash receipts from customers to their subsidiary ledger accounts. A) True B) False Learning Objective 14-6 1) The auditor would expect that an account receivable from a customer would be written off by the client when which of the following occurs: A) the customer files for bankruptcy. B) the account is at least six months old. C) a collection agency cannot inspire customer to pay the debt. D) the client company concludes that an amount is no longer collectible. 2) The auditor’s primary concern in performing audit procedures of the write-off of uncollectible accounts relates to the risk that the client writes offs customer accounts that have already been collected. The primary control for preventing this fraud is: A) examining authorized credit memos. B) examining the uncollectible account authorization form. C) examining debit memos. D) examining the vouchers payable register. 3) Generally, audit evidence gathered from the sales and collection cycle is combined with evidence: A) as the evidence accumulation process proceeds. B) only when all fieldwork processes of the engagement are completed. C) only after the audit of the sales and collection cycle is concluded. D) after the conclusion of both the cash cycle and the sales and collection cycle.