Final answer:
During an audit, an auditor must control all cash and negotiable assets primarily to prevent theft (option c). This is necessary to maintain the integrity of the cash count and protect the bank's assets.
Step-by-step explanation:
Control Over Cash During an Audit
When counting cash on hand, the auditor must exercise control over all cash and other negotiable assets to prevent theft. Control measures are crucial to ensure the integrity of the cash count and to avoid any misappropriation of funds. Other risks like irregular endorsement, deposits in transit, and substitution are important to consider, but the primary purpose of controlling cash during an audit is to thwart potential theft activities. By controlling cash, auditors can prevent unauthorized transactions and ensure the accurate reporting of a bank's assets which include cash, reserves at the Federal Reserve Bank, customer loans, and bonds.
Banks play an essential role in easing transactions in markets by enabling the storage and withdrawal of money. The presence of banks alleviates the need for individuals and businesses to maintain large quantities of cash since the money can be stored in checking or savings accounts and accessed as needed through direct withdrawals, checks, or debit cards.