During the Testing of a Year End Bank Reconciliation, an Auditor

question 88

Multiple Choice

During the testing of a year end bank reconciliation, an auditor noticed that the majority of checks listed as outstanding at year-end had not cleared the bank. Which of the following is a likely explanation?

• A) A high probability of kiting.
• B) A high probability of lapping.
• C) The year-end cash disbursements records had been closed prior to year-end.
• D) The year-end cash disbursements records had been held open past year-end.

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Definitions:

Predicate Term

A component of a logical statement that asserts something about the subject of the statement.

Subject Term

In logic, the term about which something is being declared in a proposition, typically appearing as the subject in the grammatical structure of the statement.

Standard Form

A predefined and commonly accepted way of presenting information or arguments, typically to facilitate clear communication and understanding.

Nonstandard Form

A term used to describe an atypical or irregular structure or format, often in contrast to a conventional or widely accepted standard.