92. Indicate whether each of the following items regarding internal control is true or false.
_____ a) Accounting controls are composed of procedures designed to safeguard assets and ensure accounting records contain reliable information.
_____ b) Administrative controls concern the reliability of the financial statements and the accuracy of the general ledger.
_____ c) Whenever possible, the functions of authorization, recording and custody should be exercised by the same dependable employee.
_____ d) Cash is most susceptible to embezzlement at the points of receipt and disbursement.
_____ e) A well-designed internal control system can prevent collusion by employees.
93. Indicate whether each of the following items regarding petty cash is true or false.
_____ a) The establishment of a petty cash fund is an asset use transaction.
_____ b) The replenishment of a petty cash fund is an asset use transaction.
_____ c) At any time, the total of the petty cash vouchers plus the remaining coins and currency should equal the balance of the Petty Cash ledger account.
_____ d) If a shortage occurs, a credit is entered to the Cash Short and Over account.
_____ e) There is no journal entry made in the accounting records at the time when petty cash funds are disbursed.
94. Indicate whether each of the following statements about the auditor's role in financial accounting is true or false.
_____ a) The proper conduct of an audit guarantees the accuracy of all figures on the financial statements.
_____ b) The financial audit is a detailed review of a company's financial statements and documents.
_____ c) The primary responsibility of the independent accounting firm is to the audit client.
_____ d) The most favorable type of audit report is called an unqualified opinion.
_____ e) The ultimate responsibility for the financial statements lies with management of the company rather than the independent accounting firm.