For most audits, a proper cash receipts cutoff is less important ...

[Apple716]

Question 1

For effective internal control, employees maintaining the accounts receivable subsidiary ledger should not also approve
◦ employee overtime wages.
◦ credit granted to customers.
◦ write-offs of customer accounts.
◦ cash disbursements.

Question 2

For most audits, a proper cash receipts cutoff is less important than the sales cutoff because the improper cutoff of cash
◦ is detected and correct when cash is separately audited.
◦ is unlikely to have a material impact on the balance sheet or the income statement.
◦ affects items on the balance sheet but does not affect net income.
◦ rarely occurs given the control consciousness of most entities.

[as4309]

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[Apple716]

Thanks for the timely response, appreciate it

[helenmarkerine]

Gracias!