Choose for every situation the right level risk: Rank 3, Rank 5, Rank 1, Rank 2, or Rank 4:

Situation A: Controls satisfying management assertions: No control procedure(s) exist at each accounting process. However, receiving checks and remittance advices and making the cash receipts list is done by a clerk. The transactions are recorded by someone other than the clerk who receives the checks and makes the cash receipts list.

[ Choose ] Rank 3 Middle Risk Rank 5 Highest Risk Rank 1 Lowest Risk Rank 2 2nd Lowest Risk Rank 4 2nd Highest Risk

Situation B: Controls satisfying management assertions: Checks and Remittance advice process does not have a control that satisfies the management assertion of “Existence/ Occurrence.” Cash receipts list is missing a control to satisfy completeness management assertion. The other processes have a control or more than one control so that all the management assertions are met. A compensating control exists at the AR GL process to for missing controls at checks and remittance advice and the cash receipts list. Each control is done by someone other than the person who performs the related process.

[ Choose ] Rank 3 Middle Risk Rank 5 Highest Risk Rank 1 Lowest Risk Rank 2 2nd Lowest Risk Rank 4 2nd Highest Risk

Situation C: Controls satisfying management assertions: Each Process has a control or more than one control so that all the management assertions are met. No compensating controls exist. Each process has at least one preventive control. Each control is done by someone other than the person who performs the related process.

[ Choose ] Rank 3 Middle Risk Rank 5 Highest Risk Rank 1 Lowest Risk Rank 2 2nd Lowest Risk Rank 4 2nd Highest Risk

Situation D: Controls satisfying management assertions: Each Process has a control or more than one control so that all the management assertions are met. No compensating controls exist. Each process has at least one preventive control. The controls related to the Cash receipt list with customer ID Code and the AR GL process are performed by the same person who performs those processes.

[ Choose ] Rank 3 Middle Risk Rank 5 Highest Risk Rank 1 Lowest Risk Rank 2 2nd Lowest Risk Rank 4 2nd Highest Risk

Situation E: Controls Satisfying management assertions: Checks and Remittance advice and Cash Receipt List have controls that satisfy completeness and existence/occurrence and valuation. There are no controls that satisfy any management assertions for Cash receipt list with Customer ID Code, Cash and AR general ledger. The controls that are in place are performed by the same person who performs the process.