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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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?
The year-end cash disbursements records had been closed prior to year-end.
a.
b.
C.
d.
The year-end cash disbursements records had been held open past year-end.
A high probability of kiting.
A high probability of lapping.
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