1. For the risk of inaccurate recording of disbursements, what is the most likely internal control weakness?

       Inadequate segregation of duties in accounts payable

       Inadequate training for accounts payable employees

       Ineffective controls for matching shipping documents

       Ineffective controls for review of supporting documents

2. What is the most common cause of discrepancies in confirmation replies?

       Error — incomplete form

       Error — time lag

       Fraud — collusion

       Fraud — kiting

3. Which audit assertion is met when testing accounts payable to related parties?

       Completeness

       Existence

       Presentation

       Rights

4. For the risk of failing to record cash sales, what is the most likely internal control weakness?

       Inadequate cash register security

       Inadequate security of deposits

       Ineffective segregation of duties

       Ineffective register tape reconciliation

5. When a customer does not respond to a positive confirmation request, which auditor response would be incorrect?

       Apply alternative procedures to accounts

       No action if enough other responses were received

       Send additional confirmations on similar accounts

       Send second or third confirmation requests

6. Which of the following internal controls should be present over cash disbursement transactions?

       Authorized, independent check signer

       Electronic point-of-sale system

       Financial institution lockbox

       Segregation of sales clerk and cashier duties