The audit objective of determining that cash in bank, as stated on the reconciliation, foots correctly and agrees with the general ledger can be tested by which of the following procedures?
A)Performing tests for kiting
B)Receiving and testing a cutoff bank statement
C)Footing the outstanding checks list and the list of deposits in transit
D)Examining the minutes of the board of directors for restrictions on the use of cash

Question

Quizplus · Accepted Answer

To determine that cash in bank, as stated on the reconciliation, foots correctly and agrees with the general ledger, the auditor should perform the procedure of footing the outstanding checks list and the list of deposits in transit. This will help ensure that all items have been included in the bank reconciliation and that there are no errors or omissions in the amounts recorded on the reconciliation. Tests for kiting and examining the minutes of the board of directors for restrictions on the use of cash are not relevant to this objective. Receiving and testing a cutoff bank statement may be a useful procedure to test the completeness of cash transactions, but it is not directly related to the objective of determining that cash in bank, as stated on the reconciliation, foots correctly and agrees with the general ledger.

The Audit Objective of Determining That Cash in Bank, as Stated