The Auditor Has Decided to Use Systematic Selection of Cash

question 13

Multiple Choice

The auditor has decided to use systematic selection of cash payments when testing the control that cheque payments are supported by a supplier's invoice, a purchase requisition and a goods received note. Each cheque comprises a sampling unit. There are 5000 cheques drawn (numbered 1-5000) and the total amount of cash payments is $10 million. The sample size is 20 and the random start is 127. Given this information, the second item selected will be item no:

• A) Cheque number 5127.
• B) Cheque number 627.
• C) Cheque number 377.
• D) Some other item number.

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Definitions:

Termination

The act of ending or concluding something, such as a contract, employment, or agreement, through specific actions or by operation of law.

Dissolution

The process of legally dissolving a corporation or partnership, ending its existence as a legal entity.

Partnership End

The dissolution or termination of a business partnership, often due to the retirement, death, or withdrawal of a partner.

Fiduciary Duty

A legal obligation of one party to act solely in the best interest of another party, such as a trustee to the beneficiary, corporate board members to the shareholders, or agents to their principals.