1 Which of the Following Checks Might Indicate Kiting

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Step 1 of 5 a. An auditor is concerned about the possibility of fraud if.

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Choice C is correct.

. For each of the following indicate whether the item would be reported on the balance sheet BSre. Choice d is incorrect. An unrecorded check issued during the last week of the year would most likely be discovered by the auditor when a.

101 and 404 d. The cash receipts journal was held open for a few days after year-end. Prepare year-end bank reconciliation.

202 and 404 c. A large number of check deposits each day. An auditor will most likely detect kiting by.

Which of the following checks might indicate kiting. A large proportion of cash in an account that has not yet cleared the paying bank. Review the composition of authenticated deposit slips.

Prepare a bank transfer schedule as of June 30 using the following layout. Bills and coins on hand 52780 Travelers check 22400 Credit memo from suppliers for purchase returns 6500 Postage stamp 120 Petty cash including paid cash vouchers of 1650 2000 Balance in Savings Account wit a bank closed by BSP. Review the composition of authenticated deposit slips.

Assume all checks are dated and issued on December 30 20X1. In the Bank transfer schedule provided the transfer of check number 202 recorded as a deposit receipt on December 30 is an example of kiting. The amount reported as Cash on a com panys statement of financial position normall y.

Undelivered checks written and signed by the company. 101 and 303 b. There are two variants of kiting.

The check was recorded as a deposit in the State account on December 31 but was not recorded as a disbursement in the County account until after year end. Reconciling all bank accounts as of year end. 202 and 303 202 and 404 101 and 303.

An auditor would most likely detect kiting by reviewing the bank transfer schedule and following-up on all transfers for which the receipt date per bank is recorded in the accounting period before the disbursement date. Postdated checks that are payable to the company. Which of the following checks illustrate depositstransfers in transit at December 31 2005.

Which of the following is one of the better auditing techniques that might be used by an auditor to detect kiting. The cash accounts of Ria on December 312021 has balance of 151000 and it consist of the following. Cash in a payroll account.

Kiting may also take place within the one entity where the entity has more than one bank account. Which of the following checks might indicate kiting. Prepare a schedule of bank transfers.

A bank can monitor several check kiting indicators which give it immediate notice that there is an ongoing check kiting scheme. 101 and 104 b. These indicators are as follows.

Kiting is a technique that might be used. 1 point An auditor decides to use the blank form of accounts receivable confirmation rather than the traditional positive form. Which of the following is one of the better auditing techniques that might be used by an auditor to detect kiting.

Before the midnight deadline-midnight on the banking day following receipt of the check 16-and has not settled for the item17 If. To From 101 National Federal 202 County State 303 Federal American 404 State Republic Disbursement. 202 and 404 9 9.

High turnover of employees who have access to cash. Kiting occurs when a check drawn on one bank is deposited in another bank and no record is made of the disbursement in the balance of the first bank. Many checks are drawn on the same bank.

Prepare year-end bank reconciliation. Frequent ATM checking account withdrawals. Banks that process a large number of checks may be unable to screen and check all of the accounts that the computer indicates are active.

1As a surprise count of cash and customers checks on hand is made as a test for lapping determine that checks representing transfers of funds are properly recorded on the books. An auditor would most likely detect kiting by reviewing the bank transfer schedule and following-up on all transfers for which the receipt date per bank is recorded in the accounting period before the disbursement date. Prepare a schedule of bank transfers.

Reconciling Bank A as of year end and Bank B at the end of the first week following year end. Which of the following checks might indicate kiting. Which of the following checks might indicate kiting.

Checks 202 and 404 both. Bank Accounts Disbursement Date Receipt Date. 102 and 104 b.

101 and 303 b. The auditor should be aware that the blank form may be less efficient because. Prepare separate adjusting entries for any checks that require adjustment.

Indicators of Check Kiting. Which of the following characteristics most likely would be indicative of check kiting. 202 and 404 c.

Are dated and issued on December 30 2013. 102 and 104 d. Review subsequent bank statements received directly from the banks.

All of the above. In the reconciliation for the three bank accounts indicate the check numbers that should appear as 1 an outstanding check or 2 a deposit in transit. Many large checks that are recorded on Mondays.

Cash receipts net of the amounts used to pay petty cash-type expenditures are deposited in the bank daily b. Low average balance compared to high level of deposits. Confirmations provide information about deposits in transit that is useful in proving the clients year-end bank reconciliation.

Completing an analysis of interbank transfers and obtaining cutoff bank statements directly from all. The financial statements of the business include balance sheet and income statement. 101 and 102 c.

Frequent kiting may result in a high level of deposits coupled with a low average balance. Confirmations are essential to detecting kiting schemes. 101 and 103 c.

101 and 404 d. LO 8 The following information was taken from the bank transfer schedule prepared during the audit of Fox Cos financial state- ments for the year ended December 31 2013. 101 and 103 d.

Kiting is the fraudulent use of a financial instrument such as a check to obtain additional credit that is not authorized. The information below was taken from the bank transfer schedule prepared during the audit of Fox Cos financial statements for the year ended December 31 20X1. A check kiting scheme operates as follows.

Review subsequent bank statements received directly from the banks. Checks 202 and 404 both meet this criterion and therefore might indicate kiting. The monthly bank statement.

Kiting might be uncovered by the following audit procedures. A fraud auditor should test bank transfers for the last part of the audit period and first part of the subsequent period to detect whether a. Bank Accounts Check No.

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