CPA · Question 52 · Area III: Performing Procedures
Scenario: An auditor is auditing the cash account of a nonissuer. The auditor suspects that the controller is writing checks to pay vendors but holding them in her desk to manage cash flow, while recording them as paid to reduce accounts payable. <br/><br/>Which audit procedure would BEST detect this 'held check' scheme?
Answer options:
Confirming the bank balance with the financial institution.
Counting the petty cash fund.
Vouching the dates on the bank cutoff statement to the dates in the cash disbursements journal.
Reconciling the accounts payable subsidiary ledger to the general ledger.
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