Auditing Fundamentals

For each of possible misstatements listed below, identify one audit procedure that would be most effective in providing evidence regarding the potential misstatement. You will have more options than matches! Theauditornoticedasignificantincreaseinthenumberoftimesthatpettycasewasreimbursedduringtheyearandsuspectsthatthecustodianisstealingfromthepettycashfund.1.Sendastandardbankconfirmationconfirmingthebalanceinthebankatyear-end.2.Comparethedetailsofthecashreceiptsjournalentrieswiththedetailsofthecorrespondingdailydepositslips. During tests of the 3. Count the balance in the petty cash reconciliation of the payroll at year-end. bank account, the auditor notices that a cheque to an 4. Agree gross amount on payroll employee is significantly cheques to approved hours and pay lareer than ather navioll. sates During tests of the 3. Count the balance in the petly cash reconciliation of the payroll at year-end. bank account, the auditor notices that a cheque to an 4. Agree gross amount on payroll employee is significantly cheques to approved hours and pay larger than other payroll rates. cheques. 5. Obtain the cutoff bank statement The auditor suspects a and compare the cleared cheques lapping scheme exists to the year-end reconciliation. because an accounting department employee who 6. Examine invoices, receipts, and has access to cash receipts other documentation supporting also maintains the accounts reimbursement of petty cash. receivable ledger and refuses to take any vacation 7. Examine payroll cheques clearing or sick days. after year-end with the payroll journal