CA Inter P5 · Chapter 10 · Question 8 of 11
To verify balances held by a bank with other banks, the bank auditor should primarily:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Obtain balance confirmations from the other banks and examine reconciliation statements, investigating old unreconciled entries
Explanation
Balances with RBI and other banks are verified by obtaining confirmations, comparing them with the books and examining reconciliations. Long-outstanding or unusual reconciling items may indicate errors or frauds and should be investigated. A manager's certificate is internal evidence and less reliable.
More Audit of Banks MCQs
- Q10Just before the year-end, a bank sanctioned a fresh loan to a borrower whose existing account was overdue for more than 90 days, and used…
- Q11The central statutory auditor of a bank receives reports from the auditors of many branches. When using the work of branch auditors, the…
- Q1The statutory auditor of a banking company is appointed in accordance with:
- Q2Under the RBI prudential norms, a term loan becomes a non-performing asset when:
- Q3A borrowal account of a bank became a non-performing asset on 30 June 2024 and has remained NPA continuously since then, with no…