Which of the Following Tests of Controls Is Useful to Test

question 67

Multiple Choice

Which of the following tests of controls is useful to test the transaction-related audit objective of posting and summarization?

• A) Observe whether monthly statements are sent.
• B) Observe unrecorded cash at a point in time.
• C) Observe whether the accountant reconciles the bank account.
• D) Observe endorsement of incoming checks.

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Definitions:

International Bonds

Bonds issued in a country by a foreign entity, in the currency of the country where it is issued, as a way for the issuer to gain access to a foreign capital market.

Eurocurrency

Currency deposited by national governments or corporations in banks outside their home market, typically in a currency not native to the deposit location.

Financial Centre

A global city known for hosting a cluster of national or international financial institutions, markets, and service providers.

Money

A medium of exchange that enables the transfer of goods and services among parties.