5. Which one of the following procedures would be considered improper by the auditor in the process of confirming receivables?

a.	The auditor allows the client's staff to prepare the confirmation letters after the auditor has chosen the items to be confirmed.
b.	The auditor allows the client to sign the confirmations after they are prepared.
c.	The auditor allows the client's staff to mail the confirmation letters after he or she has proofed the typing of the letters.
d.	The auditor asks the addressee to return the confirmation to the audit firm's office.

6. To determine whether any accounts receivable are pledged or assigned to others, the auditor would most likely perform which of the following procedures?

a.	Examine subsequent collections.
b.	Test a sample of transactions to the general ledger.
c.	Review loan agreements and board of directors' meeting minutes.
d.	Derive an independent estimate of the allowance and compare it to pledged assets.

7. Which of the following situations would normally be discovered as part of the test of the bank reconciliation?

a.	Failure to bill a customer.
b.	Failure to include a deposit in transit on the bank reconciliation.
c.	Duplicate payment of a vendors invoice.
d.	Payment to an employee for more hours than she worked.

8. During the testing of a year end bank reconciliation, an auditor noticed that the majority of checks listed as outstanding at year-end had not cleared the bank. Which of the following is a likely explanation?

a.	A high probability of kiting.
b.	A high probability of lapping.
c.	The year-end cash disbursements records had been closed prior to year-end.
d.	The year-end cash disbursements records had been held open past year-end.