Management 411 Test Banks [211581] 2023

Auditing Transaction Cycles - -•Most accounts have a typical "risk profile" by account-assertion! •Cash - Existence is typically Higher Inherent Risk •There is usually a standard set of documents and records that we might be able to use as evidence for an account-assertion. •Cash can be confirmed with Bank(s) •Therefore, there are usual audit plans used to gain the evidence we need for an account-assertion -•Most accounts have a typical "risk profile" by account-assertion (T/F) - -True -•These "typical" audit plans assume a client wants to: - -•Maximize Revenue and Assets •Minimize Liabilities and Expenses -Inherent risk of existence of cash - -higher, Asset so risk of overstatement is typically higher -Inherent risk of completeness of cash - -Lower, Asset so risk of understatement is typically lower -Inherent risk of valuation of cash - -lower, easily determinable value -Inherent risk of rights and obligations of cash - -Lower, Client unlikely to try to claim Cash that doesn't belong to them -Inherent risk of Presentation & disclosure of cash - -lower, Few, straightforward disclosures -Cash In - --Sale of product/service leads to payment of Cash as either physical cash, check, credit card, or wire transfer -For CC payments, the client works with the CC company (Visa, Mastercard, etc.), and receives the cash from "batches" of CC payments (usually daily or weekly)