A major consideration in the audit of the general cash balance is the possibility of fraud. The auditor must extend his or her procedures in the audit of year- end cash to determine the possibility of a material fraud when there are:
A) large cash balances at the end of the year.
B) large cash receipts and disbursements during the year.
C) inadequate internal controls.
D) no imprest accounts used for payroll.

Question

Quizplus · Accepted Answer

Inadequate internal controls increase the risk of fraud, so auditors must extend their procedures to assess the possibility of material fraud when internal controls are lacking.

A Major Consideration in the Audit of the General Cash