Question 4

A) Bank reconciliation audit tests are designed to detect misstatement other than through the improper payment of cash or failure to receive cash which normally would not be detected as part of the tests of the bank reconciliation. List Three misstatement that are designed to be detected by bank reconciliation.

B) Explain the purpose of testing the Client's bank reconciliation.

C) The appendix on page 3 shows the bank reconciliation of XYZ Limited and the audit programme:

i) Prepare an audit programme detailing the major audit procedures involved. (Use the format provided for the audit programme.)

ii) Identified in the audit programme the audit assertions which are being tested with each audit procedure.

Appendix

APPENDIX Audit Programme - Cash Audit Assertions Completeness Existence Accuracy Valuation Obligations & Rights Presentation & Disclosure Audit Procedure * Description of Procedure XYZ Limited Bank Reconciliation Bank of Battershield - Account 2112345 December 31, 2013 4,906,765.78 Balance as per bank ADD: Deposits in transit 2011-06-29 2011-12-30 646,906.90 699,112.38 1,436,019.25 LESS: UnpresentedCheques 2011-04-15 1210 2012-12-29 1300 2012-12-30 1301 25.312.50 13,678.26 20,570.29 (59,511.05) 6,193,274.01 Balance as per General Ledger 6,193,274.01