Which of the following statements is incorrect with respect to validation and verification?
1
The foreman of each department should be present at the time of payment of wages to prevent impersonation.
2
The chances of fraud are highest in case of cash sales.
3
While certifying cash receipts, the auditor should study the applicable system of internal checks.
4
While verifying sale of fixed assets, the auditor should ensure that profit on sale of fixed assets is treated as revenue gain.