How will you audit the bank balance appearing in financial statements?

Question

Accepted Answer

Bank balance in financial statements can be audited by verifying bank statements, reconciling balances, and testing internal controls.

Verify bank statements to ensure accuracy of reported balance
Reconcile bank balance with general ledger balance
Test internal controls related to bank transactions
Confirm balances with the bank directly
Review any unusual transactions or discrepancies
Consider the risk of fraud or error in bank transactions

Accepted Answer

Give answer wrt Assertions. Eg - I would check the existence through Bank External Confirmations. I would check for completeness of all the Bank Accounts. I would check Cut-off using Bank Reconciliation statement and testing for subsequent clearances for all the open items. If there are foreign currency involved, I would check for the valuation by finding Fx rates by myself and comparing them with the client's applied rates

How will you audit the bank balance appearing in financial statements?

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