Based on your accounting experience, advanced knowledge and practical experience with concepts related to automated accounting systems and digital auditing applications, you have been assigned to audit the bank reconciliation memorandum prepared by the company’s accountant, in which the cash balances in the company’s books did not match the cash balances in the bank statement. Here is the following information to do what follows: Available information The cash balance on December 31, 2016 according to the books of Asaad Establishment was 11589 dinars, and the cash balance according to the bank’s statement on the same date was 15903 dinars, and it was found that the differences are due to the following reasons: 1- Deposits on the road on 31/12 2200 dinars 2- Unpaid checks: Check number 453 3000 dinars Check number 457 1401 dinars Check number 460 1502 dinars 3- Mistakes: Check No. 443 with a value of 1226 dinars was drawn up by the project in favor of one of the creditors, but the accountant recorded it at 1262 dinars, and the bank recorded it with the correct value. 4- The following notices are attached to the bank statement: - A debit notice attached to a bounced check for insufficient balance and its value is 430 dinars. Debit note, bank charges of 30 dinars. - A credit note stating that the bank obtained in favor of the facility a cash note of 1,000 dinars and interest of 50 dinars, from which the bank deducted 15 dinars as collection expenses. Required: 1- A statement of the reasons for the discrepancy that appears when the numbers do not match when checking the bank’s settlement memorandum and the procedures that the auditor takes when checking the bank’s settlement memorandum.
Based on your accounting experience, advanced knowledge and practical experience with concepts related to automated accounting systems and digital auditing applications, you have been assigned to audit the bank reconciliation memorandum prepared by the company’s accountant, in which the cash balances in the company’s books did not match the cash balances in the bank statement. Here is the following information to do what follows:
Available information
The cash balance on December 31, 2016 according to the books of Asaad Establishment was 11589 dinars, and the cash balance according to the bank’s statement on the same date was 15903 dinars, and it was found that the differences are due to the following reasons:
1- Deposits on the road on 31/12 2200 dinars
2- Unpaid checks:
Check number 453 3000 dinars
Check number 457 1401 dinars
Check number 460 1502 dinars
3- Mistakes: Check No. 443 with a value of 1226 dinars was drawn up by the project in favor of one of the creditors, but the accountant recorded it at 1262 dinars, and the bank recorded it with the correct value.
4- The following notices are attached to the bank statement:
- A debit notice attached to a bounced check for insufficient balance and its value is 430 dinars.
Debit note, bank charges of 30 dinars.
- A credit note stating that the bank obtained in favor of the facility a cash note of 1,000 dinars and interest of 50 dinars, from which the bank deducted 15 dinars as collection expenses.
Required:
1- A statement of the reasons for the discrepancy that appears when the numbers do not match when checking the bank’s settlement memorandum and the procedures that the auditor takes when checking the bank’s settlement memorandum.
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