An audit procedure which compares the name, amount, and dates shown on remittance advices with cash receipts journal entries and with related duplicate deposit slips would be effective in detecting:
A) sales without proper credit authorisation.
B) illicit write-offs of customers as uncollectible accounts.
C) kiting.
D) lapping.

Question

Quizplus · Accepted Answer

This audit procedure is effective in detecting lapping because it involves verifying that the details (name, amount, and dates) on remittance advices match those in the cash receipts journal and deposit slips. Lapping is a fraud that involves delaying the recording of cash receipts to cover up the misappropriation of funds. By ensuring that the details match across documents, an auditor can detect discrepancies indicative of lapping.

An Audit Procedure Which Compares the Name, Amount, and Dates