An example of a substantive test for cash balances would be to _______.

Question

Quizplus · Accepted Answer

Tracing the beginning balance for cash on-hand and in bank to prior year's working papers is a substantive test for cash balances as it verifies the accuracy of the balance sheet amount by comparing it to the previous year's records. Obtaining written representations from management pertains to management's responsibility for the financial statements and does not provide evidence of the existence or accuracy of cash balances. Relying solely on the internal audit function is not sufficient as it does not provide independent evidence. Sending a confirmation to the client's legal counsel is not an appropriate test for cash balances.

An Example of a Substantive Test for Cash Balances Would