Auditors Are Likely to Prepare a Proof of Cash When

question 41

Multiple Choice

Auditors are likely to prepare a proof of cash when the client has:

• A)material control weaknesses in cash receipts and cash disbursements.
• B)material control weaknesses in accounts receivable and revenue.
• C)material control weaknesses in accounts payable and inventory.
• D)material control weaknesses in payroll.

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Definitions:

Commission Scale

A structure that determines how much commission an employee or agent will earn based on the level of sales or revenue generated.

Selling Price

The price at which an item or service is sold to the buyer.

Base Salary

The initial rate of compensation that an employee receives, not including any extra benefits, bonuses, or earnings that might be applicable.

Gross Salary

The total compensation received by an employee before any deductions like taxes, retirement contributions, and health insurance.