Assume the beginning balance in cash was audited in the prior year and is considered to be correct. In the current year, the auditor verifies that sales and cash receipts transactions are correctly recorded in the accounting records and posted to the general ledger. Before the auditor can reach a conclusion about the ending balance in the cash account in the current year, cash disbursement transactions will have to be audited.

Question

Quizplus · Accepted Answer

The auditor needs to audit cash disbursement transactions to ensure that the cash balance is correct at the end of the period. Without verifying cash disbursements, the auditor cannot fully assess the accuracy of the ending cash balance.

Assume the Beginning Balance in Cash Was Audited in the Prior