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:

Realistic Goals

Objectives or targets that are practical, achievable, and based on reasonable expectations.

Zeigarnik Effect

The psychological phenomenon where uncompleted or interrupted tasks are remembered better than completed ones.

Intrusive Thoughts

Unwanted thoughts, images, or urges that repeatedly enter a person’s mind, often causing significant anxiety or discomfort.

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later reward, often associated with better long-term outcomes.