You are auditing the bank account of Calcutta Ltd (Calcutta).You decide to send a standard bank confirmation request to the financial institutions with which Calcutta has done business during the year.A primary purpose of this test is to:
A)provide the data necessary to reconcile the accounts receivable subsidiary ledger with the general ledger.
B)analyse the notes payable journal.
C)detect kiting activities that may otherwise not be discovered.
D)corroborate information regarding Calcutta's deposits and loan balances.

Question

Quizplus · Accepted Answer

The primary purpose of sending a standard bank confirmation request is to verify the accuracy of information regarding the client's deposits and loan balances. This will help to ensure that the information in the financial statements is reliable and accurate. Options A and B are irrelevant to this test, and option C relates to detecting fraud rather than verifying the accuracy of information in the financial statements.

You Are Auditing the Bank Account of Calcutta Ltd (Calcutta)