Author Question: When designing tests of controls and substantive tests of transactions for cash receipts, it is ... (Read 44 times)

nanna · **on:** Aug 21, 2022

Question 1

When an employee who is authorized to make customer entries in the accounts receivable subsidiary ledger purposefully enters cash received into the wrong customer's account, that employee may be suspected of
◦ kiting.
◦ lapping.
◦ floating.
◦ shorting.

Question 2

When designing tests of controls and substantive tests of transactions for cash receipts, it is important to remember that
◦ the test of controls are designed to test for monetary misstatements.
◦ auditors use the same methodology for designing tests of controls and substantive tests of transactions for cash receipts as they use for sales.
◦ the tests of controls are not dependent on the controls the auditor identifies.
◦ the tests of controls are not dependent on whether the company being audited is publicly traded.

MajorWaffle · **Reply #1 on:** Aug 21, 2022

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