Audit is the bane of my existence. I need help with the Cash Transaction Cycle (A4 if you have Becker)...Kiting in particular.
The question is about what an auditor would do upon receiving a bank cutoff statement....I'm between two choices:
1) Trace PY checks listed in the cutoff statement to year-end outstanding checklist...or
2) Deposits in transit listed in the cutoff statement to the year-end bank reconciliation.
For some reason I can't understand Kiting based on the descriptions in Becker, and how it applies to cut-off statements and what not. Why is the answer #1??
I also am struggling with independence...as in, family members, audit staff, audit manager/partner/etc holding either direct or indirect financial interests in the audit client. Does anyone have anything that helps them remember independence relating to financial interests??
In addition, I could use general study techniques any of you have used that have proved successful.