Which of the Following Controls Over Cash Would an Auditor

question 29

Multiple Choice

Which of the following controls over cash would an auditor expect to observe?

• A)Reconciliation of the general ledger to the subsidiary ledger.
• B)Checks permanently marked "for deposit only" with the proper routing information.
• C)Internal audits of marketable securities held in the company's lockbox.
• D)Authorization privileges given only to those employees using the accounting system.

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Definitions:

Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, calculated as (Actual rate - Standard rate) x Actual hours.

Standard Hourly Rate

The predetermined cost per hour for labor, used in budgeting and costing to assign labor costs to products and services.

Standard Quantity

The budgeted or pre-determined amount of material or input expected to be used during a manufacturing process.

Standard Hours Allowed

The time that should have been taken to complete the period’s output. It is computed by multiplying the actual number of units produced by the standard hours per unit.