Unformatted text preview: 94. What audit procedures would not be highly effective for detecting fraud in the sales and collection cycle? a. Ascertain appropriate segregation of duties. b. Review monthly bank reconciliations. c. Verify accounts receivable balances. d. Observe the actual distribution of payroll checks to employees. e. None of the above. 95. What audit procedure would not be highly effective for detecting fraud in the payroll cycle? a. Verify accounts receivable balances by positive confirmations. b. Observe the actual distribution of payroll checks to employees. c. Sample personnel files and physically observe personnel. d. Observe the duties of employees being performed. e. None of the above. 96. Cash fraud, inventory fraud, fixed asset fraud, payables and disbursement fraud, and payroll fraud are all examples of: a. Financial reporting fraud. b. Management fraud. c. Misappropriation of assets. d. The fraud triangle. e. None of the above. 98. Lapping is defined as: a. Replacing new inventory with old. b. Stealing a customer's payment and concealing the theft by applying subsequent payments from other customers to the first customer's account. c. Taking kickbacks. d. False credits, discounts, and write‐offs. e. None of the above. 99. Kickbacks commonly occur in all of the following except: a. Construction and property management companies. b. Shipping department in which a customer pays an employee to ship a higher quality of goods than ordered. c. Purchasing agent in charge of awarding contracts. d. Accounts receivable department records returns. e. None of the above. 100. Accounts receivable fraud prevention controls include all of the following except: a. Placing a credit limit on customer accounts to immediately flag when exceeded. b. Requiring supervisory approval for all credit memos and write‐offs. c. Requiring supervisory approval before customers are added to or deleted from the master file. Page 36 of 44 ...
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This note was uploaded on 07/16/2010 for the course ACCOUNTING 2301 taught by Professor Norton during the Summer '10 term at Academy of Design Tampa.
- Summer '10