A Financial Statement Auditor Concludes That Internal Controls Over Cash

question 82

Multiple Choice

A financial statement auditor concludes that internal controls over cash are not functioning as designed.She believes that material misstatements to the cash accounts are possible because of the deficiencies.What is the course of action that the auditor will most likely take?

• A)Report the audit to the regulatory agencies of the IRS and SEC.
• B)Develop specific tests for cash balances to determine the extent of misstatement.
• C)Explain to the client that the audit firm will not be able to complete the audit.
• D)Test the internal control over cash.

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Definitions:

Radiopaque Substance

A material that does not allow X-rays or other forms of radiation to pass through, appearing white or light on a radiograph.

Cystoscopy

A diagnostic procedure that allows the doctor to examine the bladder and the urethra using a thin, lighted instrument called a cystoscope.

Prefix Dys-

A prefix in medical terminology denoting a difficulty, pain, or abnormality in the function of a specified body part or system.

Dysuria

The medical term for painful urination, which can be a symptom of various urinary tract conditions or infections.