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

Question

Quizplus · Accepted Answer

This procedure helps detect lapping, which involves concealing the theft of cash by delaying the recording of cash receipts. By comparing remittance advices with cash receipts and deposit slips, discrepancies can be identified, indicating potential lapping.

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