In reviewing the bank reconciliation prepared by the client, the auditor finds a “miscellaneous reconciling item.” From discussion with the client, the auditor is told that this relates to foreign exchange fluctuations.
The auditor should:

(a) accept the client’s explanation.

(b) accept the client’s explanation, provided it is also noted in the management representation letter.

(c) ask the client to provide a detailed schedule of the amounts that make up this variance for subsequent review.

(d) try to find what constitutes the difference personally.