Explain how an auditor would carry out the verification of cash at bank.

      

Explain how an auditor would carry out the verification of cash at bank.

  

Answers


Kavungya
• Obtain the hank reconciliation statement and trace the entries in the cash book and those
in the bank statement into the reconciliation statement
• Obtain the bank statement directly from the bank and check the banking and withdrawals
from the statement.
• Check the arithmetic accuracy of each balance and all the outstanding items at the year
end to determine whether they have cleared.
• Verify the bank balance with the bank statements and the bank confirmation received
from the bankers.
• Scrutiny of the, cash book for the exceptional entries and the transfers that have material
effects on the balances in the bank
• Identify any account of the bank secured against the company's asset for overdraft.
• Consider whether there is illegal right for the set off of overdrafts against the positive
bank balances.
• Note the large deposits and withdrawal close to the end of the financial period to
ascertain authenticity.
• For the clients who operate foreign accounts, the balances should be translated at the
year-end rates.
• Check the disclosure of the balances in balance sheet at the year end.

Kavungya answered the question on May 14, 2019 at 13:57


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