By Tracing Receiving Reports Issued at and Before Year-End to Vendors

question 81

Multiple Choice

By tracing receiving reports issued at and before year-end to vendors' invoices and making sure they are included in accounts payable, the auditor is testing for

• A) theft of merchandise by employees.
• B) unrecorded obligations.
• C) lapping.
• D) kiting.

---

Definitions:

Investment Contracts

Agreements or schemes whereby an individual invests money with the expectation of profit primarily from the efforts of others.

Foreign Corrupt Practices Act (FCPA)

A U.S. law that prohibits companies and their individuals from bribing foreign officials for business advantages.

Bribery Provisions

Legal rules or clauses that deal with the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty.

Grease Payments

Small sums of money given to minor officials to expedite or ensure the performance of routine or necessary actions.