One of the Commonly Used Substantive Tests for Cash Balances

question 20

Essay

One of the commonly used substantive tests for cash balances is to verify bank reconciliations performed by the entity. Name the five steps in verifying the bank reconciliation. Are there circumstances under which auditors might perform the bank reconciliation for themselves? If not, why not? If so, what are they?

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Definitions:

Two-Way Communication

A form of communication where information flows in both directions, allowing for feedback and interaction.

Socially Responsible Investors

Individuals or organizations that choose to invest in companies that contribute positively to society, considering factors like environmental sustainability, social justice, and corporate governance.

Societal Impact

Societal impact involves the effect that actions or policies have on the well-being and functioning of a society.

Public Company

A rephrased descriptor for a business entity that issues shares of stock available to the public through stock exchanges or over-the-counter markets.