The auditor should ordinarily send confirmation requests to all banks with whichthe client has conducted any business during the year, regardless of the year-endbalance, because(1) this procedure will detect kiting activities that would otherwise not be detected.(2) the confirmation form also seeks information about indebtedness to the bank.(3) the sending of confirmation requests to all such banks is required by auditingstandards.(4) this procedure relieves the auditor of any responsibility with respect to nondetection of forged checks.
The auditor should ordinarily send confirmation requests to all banks with whichthe client has conducted any business during the year, regardless of the year-endbalance, because(1) this procedure will detect kiting activities that would otherwise not be detected.(2) the confirmation form also seeks information about indebtedness to the bank.(3) the sending of confirmation requests to all such banks is required by auditingstandards.(4) this procedure relieves the auditor of any responsibility with respect to nondetection of forged checks.
Chapter2: Audits Of High-risk Accounts
Section2.6: Cbi Holding Company, Inc.
Problem 2Q
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The auditor should ordinarily send confirmation requests to all banks with which
the client has conducted any business during the year, regardless of the year-end
balance, because
(1) this procedure will detect kiting activities that would otherwise not be detected.
(2) the confirmation form also seeks information about indebtedness to the bank.
(3) the sending of confirmation requests to all such banks is required by auditing
standards.
(4) this procedure relieves the auditor of any responsibility with respect to nondetection of forged checks.
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