The following client-prepared bank reconciliation is being examined by Zachary Kallick, CPA, during the examination of the financial statements of 16-26 Simmons Company SIMMONS COMPANY Bank Reconciliation 1st National Bank of U.S. Bank Account September 30, 2018 Procedure(s) Balance per bank $28.375 a. Select 2 procedures Deposits in transit b. Select 5 procedures 9/29/18 $4.500 9/30/18 6,025 1,525 $34,400 Outstanding checks: c. Select 5 procedures 8/31/18 988 2,200 9/26/18 675 1281 9/28/18 1285 850 9/29/18 1289 2,500 9/30/18 (13.450) 1292 7,225 $20,950 Error d. Select 1 procedure Check 1282, written on 9/26/18 for $270, was erroneously charged by bank as $720; bank was notified on 450 10/3/18 $21,400 . Select 1 procedure Balance per books Required: Items (a) through (e) represent items an auditor would ordinarily find on an entity-prepared bank reconciliation. The following list of audit procedures shows substantive auditing procedures. For each item, select one or more procedures, as indicated, that the auditor most likely would perform to gather evidence in support of that item. (The procedures on the list may be selected once, more than once, or not at all.) Assume that . The entity prepared the bank reconciliation on 10/3/2018. . The bank reconciliation is mathematically accurate . The auditor received a cutoff bank statement dated 10/7/2018 directly from the bank on 10/12/2018. .The 9/30/2018 deposit in transit; outstanding checks 1281, 1285, 1289, and 1292; and the correction of the error regarding check 1282 appear on the cutoff bank statement. . The auditor set control risk concerning the financial statement assertions related to cash at the maximum Audit Procedure: 1.Trace to cash receipts journal. Trace to cash disbursements journal. 3. Compare to 9/30/2018 general ledger 4. Directly confirm with bank. 5.Ascertain reason for unusual delay 6. Inspect supporting documents for reconciling item not appearing on cutoff statement. 7. Vouch items on bank reconciliation to cutoff statement. 8. Vouch items on the cutoff statement to bank reconciliation 2. (AICPA, adapted)
