Following is an audit working paper that documents an auditor's test for kiting, an intentional irregularity that conceals cash shortages by transferring funds from one bank (or company) to another, recording the receipt on or before the balance sheet date, and recording the disbursement after the balance sheet date.

Required:

Discuss the deficiencies in this working paper.

Transcribed Image Text:

Elliot Enterprises December 31, 1999 A9 Disbursement Receipt Date Date Ck. Transferred Per No. From To Amount Books Per Bank Books Per Per Bank Interbank Transfers 1021 Society Bank St. Joe Bank A5 1246 St. Joe Bank Trust Corp. A6 1524 Society Bank Union Bank 5,500 15,000 7,500 12/30# 01/02 12/30@ 01/02& 12/31# 01/02 12/31@ 01/02& 12/31# 01/02 12/31@ 01/02& A8 25,000 01/01 # 01/02 12/31 01/02& Intercompany Transfers 4678 Westco (Subsidiary) Elliot & Agreed to bank statement/RC # Agreed to cash disbursement records/RC Agreed to cash receipts records/RC