An Auditor Should Trace Bank Transfers for the Last Part

question 806

Multiple Choice

An auditor should trace bank transfers for the last part of the audit period and first part of the subsequent period to detect whether:

• A) The cash receipts journal was held open for a few days after the year-end.
• B) The last checks recorded before the year-end were actually mailed by the year-end.
• C) Cash balances were overstated because of kiting.
• D) Any unusual payments to or receipts from related parties occurred.

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Definitions:

Group Judgment

The collective decision-making process or conclusion reached by a group rather than by an individual, often influenced by group dynamics.

Informational Social Influence

The process by which an individual changes their behavior to align with the group due to the belief that the group is correct.

Foot-In-The-Door Effect

A psychological principle stating that people are more likely to agree to a large request after first agreeing to a small one.

Individualism

A philosophy that places the freedom of personal actions above the regulation by collective entities or state power.