Answer_to_questions_in_Tutorial_5

Answer_to_questions_in_Tutorial_5 - Answer to questions in...

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Answer to questions in Tutorial 5 A: Multiple Choice Questions 1. (c); 2. (d); 3. (a); 4. (b) B: Problem Solving 1. Misstate ments Classify as fraud or error Give one or more controls to prevent each error/fraud from occurring Identify the audit evidence to uncover each error/fraud 1 Error Internal verification of invoice preparation and posting by an independent person. Test clerical accuracy of sales invoices. 2 Error Sales invoices are pre-numbered, properly accounted for in the sales journal, and a notation on the invoice is made of entry into the sales journal. Account for numerical sequence of invoices recorded in the sales journal, watching for duplicates. Confirm accounts receivable at year-end. 3 Fraud. All payments from customers should be in the form of a cheque payable to the company. Monthly statements should be sent to all customers. Trace from recorded sales transactions to cash receipts for those sales; confirm accounts receivable balances at year-end. 4 Fraud. The prelisting of cash receipts should be compared to the postings in the accounts receivable master file and to the validated bank deposit slip. Trace cash received from
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Answer_to_questions_in_Tutorial_5 - Answer to questions in...

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