An Auditor Confirms a Representative Number of Open Accounts Receivable

question 3

Multiple Choice

An auditor confirms a representative number of open accounts receivable as of December 31 and investigates respondents' exceptions and comments. By this procedure, the auditor would be most likely to learn about which of the following?

• A)One of the cashiers has been covering a personal embezzlement by lapping.
• B)One of the sales clerks has not been preparing charge slips for credit sales to family and friends.
• C)One of the EDP control clerks has been removing all sales invoices applicable to his account from the data file.
• D)The credit manager has misappropriated remittances from customers whose accounts have been written off.

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Definitions:

Government Research

Studies and investigations carried out or funded by the government aimed at gaining new scientific or technical knowledge and understanding.

Private Sector

Refers to the part of the economy that is run by individuals and companies for profit, as opposed to being controlled by the government.

Productivity

A measure of the efficiency of production, often calculated as the ratio of output to inputs used in the production process.

Productivity

The assessment of the effectiveness with which products and services are created, commonly measured by the amount of output for each input unit.