Question

An essential part of the auditors' responsibility in auditing cash receipts is to identify deficiencies in internal control that increase the likelihood of fraud.

A) True
B) False

Answer 1

Auditors have a responsibility to identify deficiencies in internal control that increase the likelihood of fraud in cash receipts.

Step-by-step explanation:

The statement is true.

Auditors have a responsibility to assess the internal control procedures of a company, including cash receipts, to identify any deficiencies that could increase the likelihood of fraud.

This involves evaluating the effectiveness of controls such as segregation of duties, reconciliation processes, and documentation standards. By identifying deficiencies, auditors can provide recommendations for improvement and help reduce the risk of fraud in cash handling processes.