On the last day of the fiscal year,the cash disbursements clerk drew a company cheque on bank A and deposited the cheque in the company account in bank B to cover a previous theft of cash.The disbursement had not been recorded.The auditor will best detect this form of kiting by

Question

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The best way to detect kiting is by examining paid cheques returned with the bank statement of the next account period after year-end. In this case, the auditor can compare the cheque drawn on Bank A with the cancelled cheque returned by Bank B to detect any kiting activities. Option A may help detect other types of fraud but not specifically kiting. Option B may not be useful in detecting kiting, and option C does not provide relevant information in this case.

On the Last Day of the Fiscal Year,the Cash Disbursements