After testing the bank reconciliation and inspecting the cutoff bank statement received from the bank,the auditor has determined that there are two outstanding cheques from the list on the bank reconciliation that have still not cleared the bank.The auditor's next step should be to

Question

Quizplus · Accepted Answer

The auditor should trace the details of the two outstanding cheques to the cash disbursements journal to ensure that they were properly recorded and accounted for in the company's records. This will help to identify any errors or discrepancies in the accounting records and ensure that all transactions have been properly recorded and classified. The other options are not relevant to resolving the issue of the outstanding cheques. Reperforming the calculations in the bank reconciliation or comparing the total to the bank confirmation will not address the issue of the outstanding cheques. Tracing the cheques to their associated expense accounts is also not necessary or relevant to resolving the issue.

After Testing the Bank Reconciliation and Inspecting the Cutoff Bank