ACCT 401 Saudi Electronic University The Bank Reconciliation Questions

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ebmnan

Business Finance

ACCT 401

Saudi electronic university

ACCT

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- Identify 4 of the 6 tests an auditor uses on the bank reconciliation? (1 Mark).

2- What is the difference between a contingent liability and a commitment? (1 Mark).

3- For each of the following situations, indicate what type of audit report is most appropriate:
a. The auditor lacks independence in fact, but not necessarily in appearance.
b. There is a scope limitation and it is material but the overall financial statements are still presented fairly.
c. The uncorrected misstatements are immaterial.
d. There is a departure from GAAP and it is pervasively material. (2 Marks).

4- Distinguish between the following theories of ethical behavior:

a rights-based approach, and a justice-based approach.

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College of Administrative and Financial Sciences Assignment (3) Deadline: 11/04/2020 @ 23:59 Course Name: Auditing Principles and Procedures Student’s Name: Course Code: ACCT401 Student’s ID Number: Semester: 2nd CRN: Academic Year: 1440/1441 H For Instructor’s Use only Instructor’s Name: Students’ Grade: # /5 Level of Marks: High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY • The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. • Assignments submitted through email will not be accepted. • Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. • Students must mention question number clearly in their answer. • Late submission will NOT be accepted. • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. • All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism. • Submissions without this cover page will NOT be accepted. Assignment Question(s): (Marks 5) IMPORTANT NOTE: Answer in your own words, DO NOT COPY from slides or fellow student. 1- Identify 4 of the 6 tests an auditor uses on the bank reconciliation? (1 Mark). 2- What is the difference between a contingent liability and a commitment? (1 Mark). 3- For each of the following situations, indicate what type of audit report is most appropriate: a. The auditor lacks independence in fact, but not necessarily in appearance. b. There is a scope limitation and it is material but the overall financial statements are still presented fairly. c. The uncorrected misstatements are immaterial. d. There is a departure from GAAP and it is pervasively material. (2 Marks). 4- Distinguish between the following theories of ethical behavior: a rights-based approach, and a justice-based approach. (1 Mark).
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Running head: ACCOUNTING 401

1

Accounting 401
Institution Affiliation
Date

2

ACCOUNTING 401
Introduction

Specific procedures such as auditing is conducted to ensure that actual values reflect in
the financial statements and ensure that there is accurate data in the company's financial
statements. A bank reconciliation is a statement through which a company ascertains the
differences in the cash balance in the cash book and the account in the bank. The process of bank
reconciliation helps a company in the identification of errors that may accrue in the books of
account. It also serves as a measure of fraud detection in the company as all the accounting
transactions are accounted for. Some errors in leading to bank reconciliation are as a result of
either the bank or the company. Unpresented cheques to the bank would cause the indifference
between the bank statements and the company's cashbook. Therefore, there is a need to prepare a
bank reconciliation to ensure that the figures in the bank statement are at par with those in the
cashbook.
Tests that an auditor uses on the bank reconciliation
The bank reconciliations may be faced with some issues hence the need to audit them.
Auditing will involve the financial inspection of the prepared bank reconciliation statement. The
audit process ...


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