In the audit of a client with a fiscal year ending December 31, the CPAs obtain a January 10 bank statement directly from the bank. Explain how this cutoff bank statement will be used a. In the review of the December 31 bank reconciliation. b. To obtain other audit information.
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In the audit of a client with a fiscal year ending December 31, the CPAs obtain a January 10 bank statement directly from the bank. Explain how this cutoff bank statement will be used
a. In the review of the December 31 bank reconciliation.
b. To obtain other audit information.
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- Which of the following is an effective audit procedure that an auditor might use to detect kiting between intercompany banks?a. Review the composition of authenticated deposit slips.b. Review subsequent bank statements.c. Prepare a schedule of the bank transfers.d. Prepare a year-end bank reconciliation.4. The starting point for the verification of the balance in the general bank account is to obtain: A. The client’s year-end bank statement B. The client’s cash account from the general ledger C. A bank reconciliation from the client D. A cutoff bank statement directly form the bank 5. Which of the following substantive audit procedures is most likely to be performed by the auditor to gather evidence in support of the balance per bank ? A. Compare to general ledger B. Trace to cash receipts journal C. Confirm directly to bank D. Trace items on the cut-off bank statement to bank reconciliationA1) Which of the following would the auditor most likely perform when auditing the bank reconciliation for a December 31 year-end audit? a. Confirm the audit client’s book balance shown on the bank reconciliation directly with the bank. b. Verify the audit client’s book balance shown on the bank reconciliation to the Cash balance in the audit client’s trial balance and general ledger. c. Subtract the outstanding check amounts from the audit client’s book balance. d. Verify the deposits in transit amounts to the audit client’s December bank statement.
- The starting point for the verification of the balance in the general ledger account is to obtain a. A bank reconciliation from the client b. The client’s cash account from the general ledger c. A cutoff bank statement directly from the bank d. The client’s year-end bank statementWhich of the following substantive audit procedures is most likely to be performed by the auditor to gather evidence in support of the balance per bank? a. confirm directly with bank b. compare to general ledger c. trace to cash receipts journal d. trace items on the cutoff bank statement to bank reconciliation e. all of the choiceswhen auditing a client's year end cash balance, an auditor uses standard bank confirmations and performs tests on the clients year end bank reconciliations. These substantive procedures test which of the following assertions? a. understandability of presentation and classification b. cutoff c. completeness and valuation and allowance d. rights and obligations, and occurence
- On receiving the bank cutoff statement, the auditor should trace: a. Deposits in transit on the year-end bank reconciliation to deposits in the cash receipts journal. b. Checks dated prior to year end to the outstanding checks listed on the year-end bank reconciliation. c. Deposits listed on the cutoff statement to deposits in the cash receipts journal. d. Checks dated subsequent to year end to the outstanding checks listed on the year-end bank reconciliation.MULTIPLE CHOICE: 1. An auditor ordinarily sends a standard confirmation request to all banks with which the client has done business during the year under audit, regardless of the year-end balance. A purpose of this procedure to A. request a cutoff bank statements and related checks be sent to the auditor B. Detect kiting activities that may otherwise not be discovered C. Seek information about contingent liabilities and security agreements D. Provide the data necessary to prepare proof of cash 2. As one of the year-end audit procedures , the auditor instructed the client’s personnel to prepare a standard bank confirmation request for a bank account that had been closed during the year. After the client’s treasurer had signed the request , it was mailed by the assistant treasurer. What is the major flaw in this audit procedure? A. The request was mailed by the assistant treasurer B. The CPA did not sign the confirmation request before it was mailed C. Sending the request was…Which procedure is an auditor most likely to use to detect a check outstanding at year-end that was not recorded as outstanding on the year-end bank reconciliation? Multiple Choice Prepare a bank transfer schedule using the client's cash receipts and cash disbursements journal. Receive a cutoff bank statement directly from the client's bank. Prepare a four column bank reconciliation using the year-end bank statement. Confirm the year-end balance using the standard form to confirm account balance information with financial institutions. MacBook Ain
- Which of the following is one of the better auditing techniques to detect kiting?(1) Review composition of authenticated deposit slips.(2) Review subsequent bank statements and cancelled checks received directlyfrom the banks.(3) Prepare year-end bank reconciliations.(4) Prepare a schedule of bank transfers from the client’s booksWhen auditing contingent liabilities, which of the following procedures would be MOST effective? a. Reviewing the allowance for doubtful accounts. b. Reviewing the bank cutoff statement. c. Examining customer confirmation replies. d. Examining invoices for repairs expense. e. Abstracting the minutes of the board of directors.MULTIPLE CHOICE: 4. An auditor who is engaged to examine the financial statements of a business entity will request cutoff bank statement primarily in order to: A. Detect lapping B. Detect kiting C. Verify reconciling items on the client’s bank reconciliation D. Verify the cash balance reported on the bank confirmation inquiry form 5. Which of the following auditing procedures would the auditor not apply to a cutoff bank statement? A. Trace year end outstanding checks and deposits in transit to the cutoff bank statement B. Reconcile the bank account as of the end of the cutoff period C. Compare dates, payees and endorsements on returned checks with the cash disbursements record D. Determine that the year-end deposit in transit was credited by the bank on the first working day of the following accounting period.
