Hello Sir, I hope you're doing good,
Referring to Caterpillar ques about cash receipts system, can you please confirm if there's a reason for ''reperformance of reconciliation'' not given as test of control, they've only talked about reviewing the reconciliations, I mean is there something like reperformance isn't possible or just that we can write either review/reperform.
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Test of controls
5y ago#1To REPERFORM a bank reconciliation means you are verifying the actual £/$ amounts by agreeing them to evidence (e.g. "balance per the bank statement" will be agreed to external documentary evidence that in the bank statement) - this is substantive. (And will always be a procedure at the reporting date.)
Monthly bank reconciliation by the client is a control (in itself) - to see, by REVIEWing a file (say), that a bank reconciliation has been prepared at each month end is a test of that control - it answers the Q "has the bank been reconciled?" - yes/no. There is no agreement of £/$s.
If the monthly bank reconciliation is also checked by "a responsible official" (financial accountant, say) - this should be evidenced - e,g, by a signature and date (and maybe with corrections!)
It is then a test of control to REVIEW that each bank reconciliation has a signature - yes/no?
Ohhhh ok how could I've missed such a major distinction... thank you so muchhh for making this clear!!! Thanks a million!!
5y ago#3You're very welcome!
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