On receiving a client's bank cutoff statement, an auditor most likely would trace:

Question

Quizplus · Accepted Answer

Choice "A" is correct. The auditor should obtain bank cutoff statements that include transactions for 10 to 15 days after year-end. The outstanding checks and deposits in transit at year-end on the bank reconciliation should agree with the information in the bank cutoff statement. Choice "B" is incorrect. The deposits in transit are listed in the year-end bank reconciliation and traced to actual deposits appearing on the bank cutoff statement. The cutoff statement includes actual deposits received, not deposits in transit. Choice "C" is incorrect. Checks dated after year-end would not be included in the year-end outstanding checklist. Choice "D" is incorrect. Deposits recorded in the cash receipts journal after year-end do not affect the cash balance at year-end, and therefore the auditor would not perform audit procedures with respect to those deposits.

On Receiving a Client's Bank Cutoff Statement, an Auditor Most