Tests to detect lapping are only performed when control risk for cash receipts transactions is moderate or low.

Question

Quizplus · Accepted Answer

Tests to detect lapping are performed when there is a concern about the misappropriation of cash, which can occur regardless of the assessed level of control risk. They are especially important when control risk is considered high, as lapping involves the manipulation of accounts to cover up theft, indicating a potential weakness in internal controls.

Tests to Detect Lapping Are Only Performed When Control Risk