Question 1
Because cash is the most desirable asset for people to steal, it has a higher
◦ control risk.
◦ inherent risk.
◦ detection risk.
◦ liquidity risk.
Question 2
If a bank does
not respond to a bank confirmation request, the auditor would most likely
◦
| Perform alternative procedures | Send a second
request | Ask the client to communicate with the bank to ask them to complete and return the confirmation |
| No | Yes | Yes |
◦
| Perform alternative procedures | Send a second
request | Ask the client to communicate with the bank to ask them to complete and return the confirmation |
| No | No | Yes |
◦
| Perform alternative procedures | Send a second
request | Ask the client to communicate with the bank to ask them to complete and return the confirmation |
| Yes | No | Yes |
◦
| Perform alternative procedures | Send a second
request | Ask the client to communicate with the bank to ask them to complete and return the confirmation |
| Yes | Yes | No |
Bank
Bank reconciliation form.
Example of Reconciling a Bank Statement Cont.
Offshore spawning stock biomass, Grand Bank Atlantic Cod since the early 1980s
Confirming the Confirmation Bias
Quick confirmation