Disbursements on the bank transfer schedule should be correctly included in or excluded from year-end bank reconciliations as outstanding cheques.Understating outstanding cheques on the bank reconciliation indicates

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Disbursements on the bank transfer schedule should be correctly included in year-end bank reconciliations as outstanding cheques. If they are excluded, this would result in an understatement of outstanding cheques on the bank reconciliation, which could be a sign of kiting (a fraudulent activity involving the intentional creation of a fake cheque to temporarily inflate the account balance). This could also result in an understatement of the bank balance, which may increase inherent risks associated with cash. However, there is no indication of a cutoff error in the bank account.

Disbursements on the Bank Transfer Schedule Should Be Correctly Included