Question

To gather evidence regarding the balance per bank in a bank reconciliation, the auditors would examine any of the following except:

1) Cutoff bank statement.
2) Year-end bank statement.
3) Bank confirmation.
4) General ledger.

Answer 1

When auditors conduct a bank reconciliation, they review documents like cutoff and year-end bank statements, and bank confirmations. The general ledger, which is an internal company record, would not typically be examined to verify the balance per bank.

Step-by-step explanation:

The student's question pertains to evidence gathering during a bank reconciliation process, specifically focusing on which documents would not typically be examined by auditors to verify the balance per bank. In carrying out a bank reconciliation, auditors typically examine documents that directly relate to the bank's statements and activities, such as a cutoff bank statement, a year-end bank statement, and a bank confirmation. These documents are reviewed to ascertain the accuracy of the closing balance of the bank account at the year-end. However, the general ledger is not as relevant in verifying the balance per bank since it is an internal record of the company's transactions, including all debits and credits, and not a bank document.

Answer 2

The statement that is true regarding the evidence auditors examine for the balance per bank in a bank reconciliation is:

4) General ledger.

Explanation:

General ledger: The general ledger holds all financial transactions and account balances. While auditors use this as a reference, it's not the direct external evidence they examine; rather, they rely on it to compare and reconcile with the other documents, such as bank statements and confirmations.

In this case, the auditors typically wouldn’t "examine" the general ledger as external evidence, making it the exception among the listed options.

By excluding the other options, the correct statement about evidence examination for the balance per bank in a reconciliation is that auditors would not directly examine the general ledger, unlike the other listed documents.

The statement that is true regarding the evidence auditors examine for the balance per bank in a bank reconciliation is: 4) General ledger.