Accounting Multiple Choice Question – 17 August 2026

In which ONE of the following situations should an auditor carry out a cash count?

Select ONE answer:

1. A client has many cash floats, which are immaterial in total
2. A client has poor controls over cash floats, which are immaterial in total
3. An individual cash float is material
4. The auditor does NOT suspect that a fraud has been committed in relation to immaterial cash floats

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – The auditor should count an individual cash float which is material because he should test all material items. He should also count immaterial cash floats where he suspects that a fraud has been committed as although the individual floats are immaterial, the overall impact of such a fraud could be material to the financial statements if repeated over time.
4. Not correct

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