Elizabeth Cheng, CIA, works for a large department store.She is performing an audit of her company's cash function.Which of the following is an action in which due professional care is lacking?
A)Cheng flowcharts the work of the cash function but tests only a sample of the transactions.
B)Cheng is extremely pleased with the internal controls and the operation of the cash function and in her report states that she is sure no irregularities are currently present.
C)Cheng reviews company records to ascertain that all employees who handle cash receipts and disbursements are covered by workers compensation.
D)Cheng knows that the work of the cash function can be done effectively with one less employee.She includes this finding in her report even though she knows it will adversely affect employee morale in the cash function.

Question

Quizplus · Accepted Answer

Option B lacks due professional care as Elizabeth Cheng cannot guarantee the absence of irregularities in the cash function, as she has not yet completed her testing. Cheng should not make any definitive conclusions until she has reviewed all transactions and tested them appropriately.

Elizabeth Cheng, CIA, Works for a Large Department Store