Why do auditors always audit the cash balance? (Several choices may be correct.)

1. Numerous transactions create a higher level of detection risk for the existence of cash.

2. Large volume of transactions create a higher inherent risk for completeness of cash.

3. Cash balance is usually a significant portion of total assets.

4. Cash typically has a materiality that is greater, relative to its balance, than any other account balance.

5. Cash is susceptible to theft.

Which procedures should the auditor perform to detect lapping? (Several choices may be correct.)

1. Review the bank reconciliation at the balance sheet date.

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

3. Make a surprise cash count.

4. Confirm accounts payable on a surprise basis at an interim date.

5. Confirm accounts receivable at the balance sheet date.