CPA AA Exam With Confidence Using Practice Dumps

The auditor finds a situation where one person has the ability to collect receivables, make deposits, issue credit memos, and record receipt of payments. The auditor suspects the individual may be stealing from cash receipts.

Which of the following audit procedures would be most effective in discovering fraud in this scenario?

The financial statements are the management's responsibility. They should therefore inform the auditors of any material subsequent events between the date of the auditor’s report and the date the financial statements are issued. If, after the date of the auditor's report but before the financial statements are issued, the auditor becomes aware of a fact that, had it been known to the auditor at the date of the auditor’s report, may have caused the auditor to amend the auditor’s report.

In the above situation, which of the following may NOT be an appropriate action taken by the auditor?

The management of Tory Bank Ltd suspects that a bank loan officer frequently made loans to fictitious companies, disbursed loan proceed to his wife’s accounts, and then the loan has been written-off as irrecoverable. Some significant facts about the loan officer include

•A high standard of living, explained as the result of sound investments and not taking vacations

•An expensive personal car obtained through business contacts

•Gasoline and repair bills submitted for an assigned company car that is higher than company average (mileage logs were submitted on a quarterly basis)

•Marked annoyance with questions from auditors

The most appropriate trend analysis to indicate this potential fraud is