Proof of Cash Is Prepared in the Audit When the Client

question 6

True/False

Proof of cash is prepared in the audit when the client has a significant deficiency in internal control in cash.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision.

Foregone Interest

The potential interest income lost by choosing an alternative investment or spending decision instead of the present option that yields interest.

FDIC Insurance

A federal guarantee of safety for depositor funds in member banks, up to a defined limit.

Bank Panics

Situations in which a large number of bank customers attempt to withdraw their deposits simultaneously due to fears that the bank will become insolvent.