- December 5, 2021 at 10:11 am #642584joynowMember
- Topics: 42
- Replies: 38
Past yr exam in Mar/Jun 2020
Question: compamy yr end 31 May 20×5
The company usually pays its suppliers by the end of each month.
However,due to the
financial accountant’s illness,the payment run for May 20X5 was not performed until 1 June20X5.
The finance director has informed you that in order to show consistent results with thprior year,this payment run is shown as an unpresented item on the year-end bank
Answer for audit risk:
The company’s suppliers have been paid on 1June 20X5 and the payment has been included as an unpresented item in the year-end bank reconciliation.
This is possible evidence of window dressingwhich resulits in understated payables andbank balances.
Request that the bank reconciliation is amended to remove the supplier payments at the year-end as these should be accountedfor in the 31 May 20×6 financial statements.
Review the journal entry correcting thepayables and bank balances at the year end.
Hi Mr Smith.
My query is what is unpresented item in bank reconciliation how it affects the payable and bank balances?????December 5, 2021 at 12:14 pm #642592Kim SmithKeymaster
- Topics: 100
- Replies: 6783
See my post “April 21, 2020 at 4:51 pm” in this thread https://opentuition.com/topic/assertions-in-audit-procedures
Unpresented cheques are assumed knowledge of a bank reconciliation as examinable in FA.
- You must be logged in to reply to this topic.