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:

Nameplate Voltage

The voltage at which an electrical device is designed to operate, typically indicated on a plate or label on the device.

Terminal Voltage

The voltage measured across the terminals of a device, reflecting the device's operating condition.

Electrical System

A network of electrical components connected together to generate, transmit, distribute, store, or use electricity.

Main Winding

The primary coil or loop of wire in a motor or generator that creates a magnetic field when energized.