A4

Question 1

describe kitting with dates

Answer 1

the receipt date per bank is recorded in the accounting period before the disbursement date

Question 2

what is kitting

Answer 2

when cash is recorded at two places at once (two different banks during the year end)

Question 3

what is lapping

Answer 3

taking money and not recording it , then using money from next cusomer to cover up first stolen money. it snowballs

Question 4

in regards to inventory cycle, what activites should always be segregated

Answer 4

purchasing, warehouse, shipping, receiving

Question 5

when the word vaild is used, what assertion is being tested

Answer 5

existence

Question 6

trace and vouch can be used interchangeably

Question 7

why does the auditor inspect invenotry

Answer 7

to verify its existence and condition

Question 8

what assertions is being tested in regards to slow moving or obsolete inventory or inventory turn over rates

Answer 8

valuation and allocation ( i phone example)

Question 9

what assertions is being tested through analytical review of reasonableness of investment income

Answer 9

completeness

Question 10

what assertion is being tested when we search for unrecorded liabiilites

Answer 10

existence

Question 11

what assertions is being tested in the analyze of repair and maintance account for fixed goods

Question 12

what categories does info on the mgt rep letter fall into

Answer 12

• financial statements
• completeness
• recognition, measurement, and disclosure
• subsequent events

Question 13

what do you look at when evaluating whether a contorl deficiency is a signifcat one or material weakness

Answer 13

likelihood and magnitude of any potential misstatement