The following represents a critical review of the documentation of a new auditor for the cash and marketable securities audit areas. Several deficiencies are noted; they resulted in significant errors not being initially identified.

Required
For each of the following items:
a. Identify the audit procedure that would have detected the error.
b. Identify the basic financial assertion tested by the audit procedure.
Documentation Deficiencies and Financial Statement Misstatements
1. The client was in violation of important loan covenant agreements.
2. The client was engaged in a sophisticated kiting scheme involving transfers through five geographically disbursed branch offices.
3. The December cash register was held open until January 8. All receipts through that date were recorded as December sales and cash receipts. The receipts, however, were deposited daily.
4. Cash disbursements for December were written but the checks were not mailed until January 10 because of a severe cash flow problem.
5. The client's bank reconciliation included an incorrect amount as balance per the bank.
6. Approximately 25% of the cash receipts for December 26 and December 28 were recorded twice.
7. The client's bank reconciliation covered up a clever fraud by the controller by incorrectly footing the outstanding checks and including fictitious checks as outstanding.