Final answer:
The audit procedure of tracing cash receipts to the bank statement aims to verify the accuracy of financial records. This assures that the recorded transactions match the actual bank deposits, supporting the internal control objective.
Step-by-step explanation:
Tracing a sample of recorded cash receipts from the cash receipts journal to the bank statement is an audit procedure designed to satisfy the control objective of verification of the accuracy and completeness of recorded transactions.
This audit procedure confirms that the cash receipts recorded in the company's books are consistent with the bank's records, thereby ensuring no discrepancies exist between the book figures and the actual cash amounts banked.
Performing this check is a part of the auditor's responsibility to assess the internal controls implemented by a company to prevent and detect errors or fraud in the cash receipts process.
By matching entries in the cash receipts journal with corresponding entries in the bank statement, auditors can confirm that cash received has been appropriately deposited into the bank account and accurately accounted for in the financial records.