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:

Potlatch

A ceremonial feast among certain Native American peoples of the northwestern United States and Canada, involving the generous giveaway or destruction of property to affirm or enhance one's status.

Kwakiutl Indians

The Kwakiutl Indians are a Native American tribe primarily located in the Pacific Northwest of Canada, known for their rich cultural traditions, totem poles, and potlatch ceremonies.

Nuclear Family

A family group consisting of parents and their children, without extended relatives.

Potlatch

A ceremonial feast among indigenous peoples of the Pacific Northwest with social, cultural, and economic functions, including the redistribution and reciprocity of wealth.