Confirmation Testing Workpaper - Confirmation Testing Workpaper Simply Soups Inc As of Account 10001 Fifth Federal 10002 Sparkasse-Frankfurt 10003

Confirmation Testing Workpaper - Confirmation Testing...

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Unformatted text preview: Confirmation Testing Workpaper Simply Soups Inc. As of December 31, 2013 Account 10001 Fifth Federal 10002 Sparkasse-Frankfurt 10003 American NorthWest Bank 10004 BNY Federal 10005 Tenth National Bank 10006 Bank of Citizens Reconciled Bank Balance as of 12/31/13 (per Client) $508,219.33 $315,711.76 $121,987.17 $493,154.12 $312,580.29 $304,312.43 A A A A A A Tick Legend A Balances were traced from Bank Reconciliation Testing Summary (WP 100-2). B Confirmation sent to Fifth Federal. Received the confirmation with the balance above. Sent a reconfirmation to Fifth Federal to reconfirm cash balance. Reconfirmatio same cash balance and language at the bottom reading, "Information is furnished as a matter of courtesy without a duty to do so and without responsibility, liability, or implied." Not treated as an exception. No follow up deemed necessary. C Confirmation sent to Sparkasse-Frankfurt. Received a confirmation with a different cash balance ($351,711.76). Sent a reconfirmation to reconfirm the cash balance a confirmation with the correct cash balance with a comment at the bottom stating "Sorry, transposed the numbers. Corrected balance shown above." No additional foll D Confirmation sent to American Northwest Bank. Received the confirmation with the balance above, with language in the comments stating "Simply Soups also has a banks extend a line of credit to businesses in the form of a cash credit, which may have been included in the cash balance. Sent a reconfirmation to American Northwe cash balance accounting for the line of credit as well. Received confirmation with the same balance above. Alternative procedures may be used to inquire regarding the terms. E Confirmation sent to BNY Federal. Received the confirmation with the balance above. Not treated as an exception. No follow up deemed necessary. F Paper confirmation sent to Tenth National Bank since they do not use an electronic platform. Upon looking up the address of the bank, the address lookup returned 0 residential address. We received an e-mail from Mr. Lou Jennings with the paper confirmation that Mr. Jennings claims the bank forwarded to them at Simply Soups. Al Jennings provided us with direct access to the company's bank account online. However, according to PCAOB Standards, "Direct access constitutes a confirmation respo access is provided by the confirming party rather than the company and the confirming party represents to the auditor in writing that it is aware of the auditor's reques the information and the files to be accessed contain information responsive to the request." Since this direct access was supplied by Mr. Jennings instead of Tenth Natio constitute a confirmation response. Technically, we did not hear back from the confirming party directly, deeming it a nonresponse. This will be treated as an exception that alternative procedures are performed to further investigate the cash balance at Tenth National Bank such as verifying the e-mail was in fact sent by Tenth National G The initial confirmation sent to Bank of Citizens was denied due to an unauthorized signer (Lou Jennings). Added Chuck Rogers, a manager at Simply Soups that is the account at Bank of Citizens as an authorized signer and resent a second confirmation. Received the confirmation with the balance above. Alternative audit procedures confirm that Chuck Rogers should be the authorized signer on the account and determine who is in charge of authorization privileges. H According to the PCAOB's Proposed Auditing Standard Related to Confirmation, in order to rely upon the confirmations provided through edu.Confirmation.com, an i must perform procedures to assess the risks associated with this electronic confirmation process. The risks of using an intermediary such as edu.Confirmation.com inclu of integrity, lack of proper authorization of the responses. We reviewed the SOC3 report provided on the edu.Confirmation.com website to gain comfort over the reliab report, BrightLine CPA & Associates provide an unqualified opinion on the security of Confirmation.com. The firm states in the report that Confirmation.com maintaine the system ensuring availability, reliability, confidentiality, and security. We noted that Confirmation.com receives a SOC 3 report every six months. It is also noted on th all sensitive data is encrypted and hosting facilities are secure. Based on these factors, we conclude that the Confirmation.com website is secure and reliable, thus the c through the intermediary can be relied upon. However, if in an actual audit environment we would request a SOC 1 report, which provides the greatest level of comfort such service. This type of report is not made publically available, but if it were we would want to follow up on an control deficiencies to ensure they were covered eithe controls at Simply Soups Inc or additional testing performed during the course of the audit. Workpaper Reference: 100-3 Prepared by: Chris Whelan Date: 11-14-2014 Confirmed Bank Balance as of 12/31/13 (per Bank) $508,219.33 $315,711.76 $121,987.17 $493,154.12 $312,580.29 $304,312.43 Differences Noted B H C H D H E H F H G H 0 0 0 0 0 0 . Sent a reconfirmation to Fifth Federal to reconfirm cash balance. Reconfirmation came back with the matter of courtesy without a duty to do so and without responsibility, liability, or warrant, expressed or sh balance ($351,711.76). Sent a reconfirmation to reconfirm the cash balance and received a y, transposed the numbers. Corrected balance shown above." No additional follow up deemed necessary. balance above, with language in the comments stating "Simply Soups also has a line of credit." Certain been included in the cash balance. Sent a reconfirmation to American Northwest Bank to reconfirm the ame balance above. Alternative procedures may be used to inquire regarding the company's line of credit Not treated as an exception. No follow up deemed necessary. atform. Upon looking up the address of the bank, the address lookup returned 0 business matches and 1 mation that Mr. Jennings claims the bank forwarded to them at Simply Soups. Also, in the e-mail Mr. r, according to PCAOB Standards, "Direct access constitutes a confirmation response if the auditor's party represents to the auditor in writing that it is aware of the auditor's request for the intended use of est." Since this direct access was supplied by Mr. Jennings instead of Tenth National Bank, this does not ng party directly, deeming it a nonresponse. This will be treated as an exception and it is recommended nth National Bank such as verifying the e-mail was in fact sent by Tenth National Bank. gner (Lou Jennings). Added Chuck Rogers, a manager at Simply Soups that is the authorized signer on the eceived the confirmation with the balance above. Alternative audit procedures should be performed to ne who is in charge of authorization privileges. der to rely upon the confirmations provided through edu.Confirmation.com, an intermediary, auditors n process. The risks of using an intermediary such as edu.Confirmation.com include: lack of security, lack t provided on the edu.Confirmation.com website to gain comfort over the reliability of the website. In the onfirmation.com. The firm states in the report that Confirmation.com maintained effective controls over Confirmation.com receives a SOC 3 report every six months. It is also noted on the company website that we conclude that the Confirmation.com website is secure and reliable, thus the confirmations provided nt we would request a SOC 1 report, which provides the greatest level of comfort to auditors relying on d want to follow up on an control deficiencies to ensure they were covered either by compensating udit. ...
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  • Spring '08
  • MONIKACAUSHOULLI
  • cash balance, Tenth National Bank, Simply Soups

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