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9 Cards in this Set
- Front
- Back
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5 major steps for auditing Cash/Investments |
1. consider inherent risk (including fraud risk) 2. Understand internal controls 3. Assess risk of material misstatement and design audit procedures 4. Test controls 5. Perform substantive testing |
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Bank Reconciliation (what is it, how to audit it) |
Prepared by the client, its a document comparing the clients book balance, with the balance of the bank. Trace bank balance to clients balance. Make ticks |
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Major reconciling items are:
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- deposits in transit
- outstanding checks - other adjustments |
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Bank Reconciliation Assertions |
existence, completeness, and valuation |
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Bank Confirmations |
(Sent and received under the auditor's control) Letter sent to banks making sure there balances on the client's books match with the balances of the banks. Verify the cash exist in client's books 3rd party check |
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Main Bank Confirmation Assertion |
Existence |
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Cut off bank statement |
verifies the ownership of cash/ or lack there of, pertaining to a certain date. This is a statement from the back that shows bank transactions for 7-10 days after the year being audited. Comparing this to the bank reconciliation |
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Cutoff Bank Statement Assertion |
Cutoff/ Timeliness |
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What is kiting? and how do we test for it? |
Its when you write checks from one account to another near year-end. Do not record disbursement, but record receipt. Overstate cash. |
