You Are Part of the Audit Team That Is Auditing

question 55

Essay

You are part of the audit team that is auditing Hillsburg Hardware Co. and you have been assigned to the sales and collection cycle. You are testing whether the cash receipts are deposited and recorded at the amounts received (accuracy objective). List two tests of controls and one test of transactions that you would do to satisfy yourself regarding the accuracy objective.

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Definitions:

Land

The surface of the earth, extending downward to the center and upward indefinitely into space, inclusive of natural resources and fixtures.

Deed of Trust

A legal document in some states that transfers the title of real property to a trustee as security for a loan until the grantor repays the lender.

Third Party

An individual or group besides the two primarily involved in a situation or contract, often with a lesser direct interest.

Real Property

Land and anything permanently attached to it, such as buildings and structures, including rights and interests associated with the land.