AP8.5(LO2,3,4)Testing bank reconciliation controlsYou are testing the controls over bank accounts for your audit client, Louisiana Liquidators. You note that the responsibility for bank reconciliations has changed due to a corporate reorganization halfway through the current fiscal year. Both the staff member performing the bank reconciliations and the supervisor have changed. You are able to talk only to the current staff member and supervisor because the prior staff members took a voluntary severance package and left the client's employment three months ago.

Required

1. a.What procedures are available for you to gather evidence about the bank reconciliations? Explain how you would use each procedure and comment on the quality of the evidence obtained from each.
2. b.When you ask the employee responsible for bank reconciliations about how bank reconciliations are performed, there is a possibility that you will not be told the whole truth about the performance of the reconciliations. Given this, will you bother to ask? Explain.
3. c.Explain the impact of the staff changes on your controls testing program.