An audit procedure that compares the name, amount, and dates shown on remittance advices with cash receipts journal entries and with related duplicate deposit slips would be effective in detecting
A) kiting.
B) lapping.
C) unauthorized write-offs of customers as uncollectible accounts.
D) sales without proper credit authorization.

Question

Quizplus · Accepted Answer

Lapping involves the manipulation of cash receipts and accounts receivable, often by delaying the recording of cash receipts to cover up the theft of cash. By comparing remittance advices with cash receipts journal entries and deposit slips, an auditor can detect discrepancies indicative of lapping, such as delays or alterations in recording cash receipts.

An Audit Procedure That Compares the Name, Amount, and Dates