Final answer:
B. Helps the auditor test for kiting
An interbank transfer schedule assists an auditor in testing for kiting, which is a potential fraudulent activity. It tracks the movement of funds between accounts to detect inconsistencies. The role of banks and the immediate transfer of funds using debit cards are related to the need for accurate timing in transactions.
Step-by-step explanation:
An interbank transfer schedule helps the auditor test for kiting. Kiting is a form of fraud involving the float time in the transfer of funds between two or more bank accounts.
In auditing, kiting is a concern because it can make a company's cash position appear more favorable than it actually is. The interbank transfer schedule is used to track the movement of funds and the timing of transactions to detect any discrepancies that may indicate kiting.
Banks play an essential role in transactions and the economy by facilitating the use of money through direct transfers, checks, or debit cards. Debit cards, functioning similarly to checks, are instructions to the user's bank to transfer money directly from the user's account to the seller immediately upon purchase.
This process underscores the importance of transaction timing which is critical in identifying fraudulent activities like kiting during audits.