Oceanview marine company exercise

Reference no: EM13691219

Oceanview Marine Company Exercise: Cash Audit Program
Please provide answers for the following questions related to your evaluation of the cash audit program for the 2007 audit of Oceanview Marine Company. You should type your responses to the questions posed below.

1. Based on the cash lead sheet (20-1), how many cash accounts does Oceanview have?

2. As an auditor, which account carries the greatest risk? What risk does this account pose?

3. Refer to the Audit Program for cash (20-2 to 20-3). Prepare a brief statement as to the purpose of each of the steps in the audit program (e.g., why is the auditor performing those steps? what is the risk if the step is not performed? What assertions are being tested? ) You can explain the purpose any way you choose. You only need to explain steps 2-16 in the cash program.

4. Refer to the bank reconciliation on page 20-5.

a. What is the difference between this reconciliation and the one on page 20-6?

5. Refer to the bank reconciliation on page 20-6.

a. Will the deposits in transit show up on the December 2007 bank statement? Why or why not?
b. What are some ways in which the auditor could substantiate the deposits in transit?

6. Refer to the confirmation on 20-7.
a. Why is it important for the auditor to confirm cash amounts? Why not just rely on the bank statement?
b. Why does the auditor ask about loans outstanding on the cash confirmation? Does this have anything to do with the purpose of the confirmation? Explain.

Reference no: EM13691219

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