Chapter 13. MC13-4, how to think b/w answer a and answer b? I don\t know how to do 13-6? totally don know how to start it.
MC13-4: No thinking is required here. The answer (a) – existence assertion – comes straight from Table 13-3, p.139 on “validity” the specific audit objective that is translated from the “existence assertion,” and is associated with the “supporting documents” under Internal Control in the middle column of that table. MC13-6: This question deals with separation of duties. The trick here is not to be fooled by (d) which is cash PAYMENT function (Not cash RECEIVE function). No problem here since it is cash payment. (a) and (c) are also no problem here because they are simply mechanical procedures not involving cash (accounts receivable). However, (b) must be separated from accounts receivable posting function because a bogus credit memo can be written out, and the cash stolen can be then covered up by fraudulently posting the associated account receivable account. Chapter 14. I have a question about table 14-5 in chapter 14.
