Audit & Investigations--The following is a list of auditing procedures (a through h), the auditor would consider performing to gather evidence to determine whether there is error or fraud present

a.Count the balance in petty cash at year end

b.Compare the details of the cash receipts journal entries with the details of the corresponding daily deposit slips

c.Send a standard bank confirmation confirming the balance in the bank at year end

d.Agree gross amount on payroll checks to approve hours and pay rates

e.Obtain the cutoff bank statement and compare the cleared checks to the year-end reconciliation

f.Examine invoices, receipts, and other documentation supporting reimbursement of petty cash

g.Examine payroll checks clearing after year end with the payroll journal

h.Prepping a bank transfer schedule

The following are possible misstatements due to errors or fraud. For each possible misstatement, identify one audit procedure from above that would be most effective in providing evidence regarding the potential misstatement.Listed audit procedures above may be used once, more than once, or not at all.

1.__ ____ the auditor suspects that a lapping scheme exists because an accounting department employee who has access to cash receipts and maintains the accounts receivable ledger refuses to take any vacation or sick days

2._____the auditor suspects that the entity is inappropriately increasing the cash reported on its balance sheet by drawing a check on one account and not recording it as an outstanding check on that account and simultaneously recording it asdeposit in a second account

3.__ ___the entity's cash receipts for the first few days of the subsequent year were properly deposited in its general operating account after the year end. However, the auditor suspects that the entity recorded the cash receipts in the books during the last week of the year under audit

4.__ ___the auditor noticed a significant increase in the number of times that petty cash was reimbursed during the year and suspects that the custodian is stealing from the petty cash fund

5.__ __the auditor suspects that a kiting scheme exists because an accounting department employee who can issue and record checks seems to be leading an unusually luxurious lifestyle

6.__ ___During tests of the reconciliation of the payroll bank account, the auditor noticed that a check to an employee is significantly larger than other payroll checks