Question

On receiving a client's bank cut-off statement, an auditor most likely would trace

Answer 1

Answer:

B. Prior-year checks listed in the cut-off statement to the year-end outstanding checklist.

Explanation:

Bank cutoff statement can be regarded as bank statement that is produced as of a date which is seen as date that is subsequent to the date of the balance sheet. At a point in time, this date would be the one that will give permission for most of outstanding checks to clear the bank at the year-end. Cutoff bank statement is utilized in verifying reconciling items on the bank statement which been Mailed directly to the auditor. One of the purpose of cutoff bank statements is in verification of reconciling items on the year-end bank reconciliation of clients which comes with evidence that it can't be accessible to the client. It should be noted that On receiving a client's bank cut-off statement, an auditor most likely would trace Prior-year checks listed in the cut-off statement to the year-end outstanding checklist.