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) proving the bank reconciliation as to additions and subtractions, including all reconciling items
D) examining the minutes of the board of directors for restrictions on the use of cash

Question

Quizplus · Accepted Answer

Proving the bank reconciliation as to additions and subtractions, including all reconciling items, is the appropriate procedure for determining that cash in bank as stated on the reconciliation, foots correctly and agrees with the general ledger. Choice A is incorrect because tests for kiting are used to detect fraud or irregularities, not to determine the accuracy of the cash in bank balance. Choice B refers to testing cutoff, which determines the completeness of recorded transactions. Choice D is irrelevant to the audit objective of determining the accuracy of the cash in bank balance.

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