Basic audit procedures that should be performed in gathering evidence in support of each item (a)

through (f) of Concrete Products bank reconciliation are as follows:

a. Balance per bank

▪ Confirmation by direct written communication with a bank (see Standard Bank Confirmation)
▪ Obtain and inspect a January cutoff bank statement obtained directly from the bank (examine
opening balance)

b. Deposit in transit
▪ Verify that the deposit was listed in the January cutoff bank statement on a timely basis
▪ Trace to the cash receipt journal
▪ Inspect the auditee’s copy of the deposit slip for the date of the deposit

c. Outstanding cheques
▪ Examine cheques accompanying the January cutoff bank statement and trace all 20x3, or prior,
cheques to the outstanding cheque list.
▪ Trace outstanding cheques to the cash disbursements journal
▪ Examine all supporting documents for those outstanding cheques that were not returned with
the cutoff bank statement
▪ Ascertain why cheque number 837 has been outstanding for so long

d. NSF cheque return

▪ Follow up on the ultimate disposition of the NSF cheques
▪ Examine all supporting documents

e. Note collected
▪ Examine the bank credit memo
▪ Trace to accounting records

f. Balance per books

▪ Foot the bank reconciliation to this total and compare it with the general ledger balance

Problem 2

Actions taken by the auditor

1. The auditor must investigate the discrepancies and examine the bank statement of
successive weeks for determining if the deposits have been credited to Toyco account.
2. The auditor must assess the standing of the deposits by observing the bank statement of the
successive week to regulate if the deposits were suitably submitted again and credited to
the appropriate account. The auditor must assess the regularity of worthless deposits and
suggest that the corporation reinforce controls in this particular area.
3. The bank charge must be elucidated and conversed with the customer.
4. The auditor must inspect the customer’s accounting proceedings to notice and then regulate
that why the cash transfer made from Bank B to the depository bank account was not being
recorded in the corporation’s books of account.
5. The auditor must authenticate the Bank B charges of the services they provide and must
also authenticate why Bank A does not have to pay any charge.
6. The auditor must find the causes why recording of control backs for the stolen cards are
incomplete, and must inspect the control internally over the support of the credit cards.
7. The auditor must inspect the bank statements of the successive week to regulate if all
returns from the sales for the previous week have been documented by the banks. The
auditor must regulate that the amounts which are unadjusted reach a decision with the
account balances of general ledger.