The process of evidence collection must proceed according to a correct sequence. Which of the following is a correct sequence? a. Review documents and other relevant information and then conduct interviews. b. Conduct interviews and then review documents and other relevant information. c. Conduct interviews while reviewing documents and other relevant information. d. None of the above. Which of the following controls most likely wouid assure that all bilied sales are correctly posted to the accounts receivable iedger? a. Daliy sales summaies are compared to dally postings to the accounts receivable ledger b. Each sales invoice is supported by a prenumbered shipping document. c. The accounts receivable ledger is reconcled daily to the control account in the general ledger d. Each shipment on credit is supported by a prenumbered sales invoice Which of the foliowing controls most likely would heip ensure that ali credit saies transactions of an entity are recorded? a. The biling department supervisor sends copies of approved sales orders to the credit department for comparison to authorized credlt limits and current customer account balances. b. The accounting departmerit supervisor independently reconclies the accounts receivable subsidiary ledger to the accounts receivable control monthly c. The accounting department supervisor controls the mailing of monthly statements to customers and investigates any differences reported by The billing department supervisor matches prenumbered shipping documents with entries in the sales journal. e. None of the above I4. During the consideration of a small business client's internal controis, the fraud examiner discovered that the accounts receivable cierk approves credit memos and has access to cash. Which of the following controis would be most effective in offsetting this weakness? a. The owner reviews errors in billings to customers and postings to the subsidiary ledger b. The controller receives the monthly bank statement directiy and reconciles the checking accounts. c. The owner reviews credit memos after they are recorded. d. The controller reconciles th total of the detail accounts receivable accounts to the amount shown in the ledger You should trace bank transfers for the latter part of an audit period and the early pert of the subsequent period to determino whether a. The cash balances were overstated because of kiting. b. The cash receipts joursal was held open for a few days after the end of the year. c, Any unusual payments to or reoeipts from related parties occurred. d. The last checks recorded before the year-end were really msiled by year-end. e. Nono of the above. Which statement is generaliy false? a. Neither inventory nor accounts receiveable should grow faster than sales. b The trend in operating income is as important as the trend is earnings. c. fnet income is moving up while cash flow from operations is drifting downward, somothing may be wrong. d. Horizontal analysis is commonly used with the Statement of Cash Flow e. None of the above is false
