A Procedure the Auditor Can Employ to Detect 'Lapping' Is

question 61

Multiple Choice

A procedure the auditor can employ to detect 'lapping' is

• A) confirming accounts on a surprise basis at an interim date.
• B) making a surprise cash count.
• C) comparing details of cash receipts journal entries with the details of corresponding daily deposit slips.
• D) all of the above

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Definitions:

Beta

A calculation of the extent to which a stock's price swings in comparison with the overall market.

Market Risk

The risk of losses in investments due to factors that affect the overall performance of the financial markets.

Unique Risk

Also known as unsystematic risk, it refers to the risk associated with a specific company or industry that can be mitigated through diversification.

Inflation Risk

The danger that the value of financial returns or purchasing power will be eroded as inflation diminishes the value of money over time.