Exam 6: Employee Fraud and the Audit of Cash

Which of the following would the auditor consider to be an incompatible operation if the cashier receives remittances?

A proof of cash

Ed's wife Diane owns a printing business in town.Ed works in the accounts payable department of Jiffy Abs Vitamin Company.Diane prints invoices for work supposedly done for Jiffy Abs (no actual work was performed),and Ed places the invoice in the invoice pile approved for payment.Jiffy Abs pays these invoices and sends Diane a check. a.Name two internal controls that might prevent or detect these fraudulent payments. b.Name two audit procedures that might detect this fraud

Your client is in the process of acquiring another company.You have been requested to verify that cash for the company being acquired is properly stated.The audit technique that will yield the most persuasive evidence is

Auditors use a(n)______________________________________ to obtain independent evidence of the proper listing of outstanding checks and deposits in transit on a bank reconciliation.

When you examine canceled checks returned in the bank statement by a client's bank,how could you tell whether the amount on a check had been skillfully increased (perhaps from $75.00 to $7,500 in the amount box,and altered in the written line from "Seventy-five dollars" to "Seventy-five hundred dollars")after the check was cleared by the bank? (An employee might do this to "support" a $7,500 cash disbursement journal entry.)

The assertions by management regarding the cash accounts in the financial statements include all of the following except

Which of the following management policies would increase the probability of fraud in a company?

Psychotic motivation is characterized by the habitual criminal who steals for the sake of stealing.

The key to integrity in business is "accountability."

The phases of employee fraud do not include the

List and briefly describe the three factors that increase the probability of fraud.

When an employee embezzles company funds from an electric utility company for the purpose of paying expenses of an antinuclear protest organization,the fraudster's motive is said to be

An auditor would least likely initiate a discussion with a client's audit committee concerning

An organization whose only control is "__________________________________________ " really has no control.

Someone who steals from an organization to support a political agenda is said to have a(n)____________________ motivation.

In order for auditors to be able to recognize potential fraud,they must be aware of the basic characteristics of fraud.Which of the following is not a characteristic of fraud?

An auditor wishes to perform tests of controls on a client's cash disbursements procedures.If the control activities leave no audit trail of documentary evidence,the auditor most likely will test the activities by using

Fraud consists of unintentional misstatements or omissions in financial statements.

Auditors ordinarily send a standard confirmation request to all banks with which the client has done business during the year under audit,regardless of the year-end balances.A purpose of this procedure is to