How you would test a client’s bank reconciliation
The following test should be carried out on the bank reconciliation Obtain standard bank confirmation from each bank with which the client conducted business during the period. Test arithmetic of bank reconciliation by recasting. Trace cheques shown as outstanding from the bank reconciliation to the cash book prior to the year-end and to the after-date bank statements and obtain explanations For any larger or unusual items not cleared at the time of the audit. Verify by checking paying-in slips that uncleared banking are paid in prior to the year-end and review whether uncleared banking are cleared quickly after the year-end. Verify balances per cash book according to the reconciliation with cash book and general ledger. Verify the bank balances with reply to standard bank letter and with the bank statements. Scrutinize the cash book and bank statements before and after the period-end for exceptional entries or transfers which have a materials effect on the balance shown to be in...
