Auditing & Assurance Services (Auditing and Assurance Services)
7th Edition
ISBN: 9781259573286
Author: Timothy J Louwers, Allen Blay, David Sinason Associate Professor, Jerry R Strawser, Jay C. Thibodeau Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter C6, Problem 1DQ
To determine
Indicate the steps that an auditor should take while testing the cash balances deposited with the financial institutions.
Expert Solution & Answer
Explanation of Solution
The following are the steps that an auditor should take while testing the cash balances deposited with the financial institutions:
- Obtain client permission and request for the confirmation from the banks about the cash balances deposited by client in those financial institutions or banks.
- Verify the correct bank address in order to avoid the misdirection by the client.
- Instruct the bank officials to not disclose the client personnel about the confirmations through mail, and maintain direct communication.
- Instruct the bank officials to return the responses to the audit firm, not to the client.
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Chapter C6 Solutions
Auditing & Assurance Services (Auditing and Assurance Services)
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