As one of the year-end audit procedures, the auditor instructed the entity's personnel to prepare a standard bank confirmation request for a bank account that had been closed during the year. After the entity's treasurer had signed the request, it was mailed to the bank by the assistant treasurer. What is the major flaw in this audit procedure?

Question

Quizplus · Accepted Answer

The major flaw is that the request was mailed by the assistant treasurer, which could compromise the integrity of the confirmation process. The auditor should control the mailing to ensure the confirmation is sent directly to the bank and returned directly to the auditor.

As One of the Year-End Audit Procedures, the Auditor Instructed