Improper payments of officers' personal expenditures are a type of misstatement in cash that will normally be discovered as part of the audit of the bank reconciliation.

Question

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Improper payments of officers' personal expenditures are typically identified through the examination of expense accounts and supporting documentation, not through the audit of the bank reconciliation, which focuses on reconciling bank statements with the company's cash records.

Improper Payments of Officers' Personal Expenditures Are a Type of Misstatement