Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 4

Adjusting entries for cash and investments. During your audit of the cash and investment accounts, you notice several adjusting entries in the accounts at year-end.
a. Identify several questions that you should ask management regarding the entries.
b. Describe three possible scenarios to explain the entries that involve adjustments associated with error corrections.
c. Describe three possible scenarios to explain the entries that involve fraudulent entries.