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“Re?perform a sample of the reconciliations to ensure that they have been carried out appropriately.”
maam the above sentence has been included as a part of TOC. However am finding myself a little muddled. In the post of draeills you mentioned that reperforming reconciliations would be substantive procedures, so then here what makes it TOC? the fact that it is done on a sample? Or my kit is just grossly incorrect in stating that as a TOC?
Ah … draeills was my star student in March – now posting under the name tinkle https://opentuition.com/topic/my-approach-towards-clearing-aa-with-85
As I explained to draeills – and you absolutely don’t need to know this for AA – some tests can be “dual purpose” – it essentially depends on timing and objective whether in AA you identify it as TOC or substantive test of detail.
In GENERAL, reperformance of a procedure is a TOC. So during the year, a clerk is preparing reconciliations and some supervisor is supposed to be checking them and signs to say that they have checked. The audit REPERFORMS (a sample) to confirm. As a TOC the auditor is only interested in whether the control (the supervisor’s check) operated effectively – yes or no? So your kit is CORRECT.
But for year-end reconciliations at the reporting date (regardless of whether or not there is any reliance on controls) the auditor has to know that the bank, control accounts, suppliers’ statements, etc reconcile. In this case, reperformance will agree the amount ($s) that are balances in the general ledger – this is a substantive test of details.
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