Memo - Confirmation Testing Workpaper and Memo Group...

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Confirmation Testing Workpaper and Memo Group: Auditaholics 1 To: Joy Gray – Audit Manager From: Yueming Zhang, Chenyun Shen, Zhengyi Huang – Audit Staff Date: 11/05/2015 Re: Simply Soups, Inc. Cash Confirmations Background – Positive Confirmations: Simply Soups, Inc.’s cash balances in six different financial institutes were selected for review and were compared with the reported balances. Among accounts in the six financial institutions, five were signed by Lou Jennings, and they were listed in the following banks: American NorthWest Bank, BNY Federal, Fifth Federal, Sparkasse Frankfurt, and Tenth National Bank. Another account listed in Bank of Citizens, was signed by Chuck Rogers. Among the financial institutions, Tenth National Bank was an out-of-network institution and a manual creation of the associated account information in edu.confirmation.com was required. The communication regarding the confirmation and the authorization with the Tenth National Bank was paper-based, and the relevant authorizations were received timely. Positive confirmation was selected as the method to conduct the audit procedures, since the positive confirmation significantly reduces the detection risk by requiring banks to respond regardless of their opinions about the information in request. While negative confirmation only

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