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11 Cards in this Set

  • Front
  • Back
bank confirmation
a standard confirmation sent to all banks with which the client had business during the year to obtain information about the year-end cash balance and additional information about loans outstanding
bank transfer schedule
an audit document that lists all transfers between client bank accounts starting a short period before year-end and continuing for a short period after year-end, its purpose is to ensure that cash in transit is not recorded twice, to test for the existence of kiting
an asset or a claim on an asset usually held by a borrower or an issuer of a debt instrument to serve as a guarantee for the value of a loan or security. If the borrower fails to pay interest or princpal, the collateral is available to the lender as a basis to recover the principal amount of the loan or debt instrument
commercial paper
note issued by major corporations, usually for short period of time and at rates approximating prime lending rates, usually with high credit rating; its quality may change if the financial strength of the issuer declines
cutoff bank statement
a bank statement for a period of time determined by the client and the auditor that is shorter than the regular month-end statements; sent directly to the auditor, who uses it to verify reconciling items on the client's year-end bank reconciliation
financial instruments
a broad class of instruments-usually debt securities but almost equity or hedges-that represents financial agreemetns between a party (usually an issuer) and a counter-party (usually an investor) based on either underlying assets or agreemetns to incur financial obligations or make payments; instruments range in complexity froma simple bond to complicated agreemetns containing puts or options
imprest bank account
a bank account that normally carries a zero balance and is replensihed by the company when checks are to be written against the account; provides additional control over cash. the most widely used imprest bank account is the payroll account, to which the company makes a deposit equal to the amount of payroll checks issued
a fraudulent cash scheme to overstate cash assets at year-end by recording deposits in transit in both the account from which the cash is withdrawn and the account to which it is transferred
a cash mgmt arrangement with a bank whereby an organization's customers send payments directly to a post office box number accessible by the client's bank; the bank opens the cash remittances and directly deposits the money in the client's account
marketable security
a security that is readily marketable and held by the company as an investment
turnaround document
a document sent to the customer to be returned with the customer's remittance; may be machine readable and may contain information to improve the efficiency of receipt processing