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Unformatted text preview: Unit 7 Project 12-42 1) Cut off. Confirmed by bank via 2 nd example. 2) The auditor should trace deposits as in example 1 Dec 27-31. 3) The auditor confirm the redeposit with both bank A and bank B. 4) The difference between deposits can be anything from a late deposit, (deposit not hitting the account at the same time this has happened in real life taking up to 3 days for the deposit to actually hit the account). 5) Periodic internal audit. 6) Cutoff bank statement. 7) The bank service charges which are addressed on the 2nd Tyco one, the auditor needs to get a bank confirmation from bank A and B as there is a large discrepancy. On the reconciliation it shows 500 for bank B whereas the 2nd Tyco shows 1400 for bank A and 1000 for bank B. 8) Is addressed on the 2nd Tyco summary of bank statements. 9) The auditor should examine the bank statements of the subsequent week to determine whether all sales returns for the preceding week have been recorded by the banks. The auditor should determine that these unadjusted amounts agree with the general ledger account balances. 10) Since the ending balances match there are miss steps through the ledger and the errors need to be found. On this problem, dont forget to look at the information given to you in the description of how this company and its banks operate! A lot of key information here will help you see the discrepancies and how the auditor should approach each item. You can number this problem 1 through 10, and list at least one specific step the auditor should take to gain confidence in the bank reconciliation....
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- Spring '11