A Practical and Effective Audit Procedure for the Detection of Lapping

question 2

Multiple Choice

A practical and effective audit procedure for the detection of lapping is:

• A)Preparing an interbank transfer schedule.
• B)Comparing recorded cash receipts in detail against items making up the bank deposit as shown on duplicate deposit slips validated by the bank.
• C)Tracing recorded cash receipts to postings in customers' ledger cards.
• D)Preparing a proof of cash.

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Definitions:

Right to Sell

The explicit permission granted to an individual or business entity to sell a particular product or service, often within a specific territory.

Asset

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

American Option

Call or put option that can be exercised on or before the expiration date.

European Option

A type of options contract that allows the holder to exercise the option only on its expiration date.