Remember to be as concise as possible while still providing complete answers. Use the number of marks allocated to each question to guide how much you should write, i.e., one mark suggests one to two concise, complete, and clear sentences. AUDITING "CASH" (The bank accounts) - 13 marks QUESTION 1- 1 mark Which of the client's internal control procedures would you most likely use to support the bank balances in the general ledger as compared to the bank balances as reported by the bank? 1 mark QUESTION 2 - 3 marks List and explain three (3) reasons that would account for why the client's general ledger cash balance is different from the balance reported by the bank. Assume the balance you are auditing is as at December 31 (the year end). 3 marks QUESTION 3 -5 marks I will provide one (1) example to guide you but do not use this example, i.e., bank service fees in your final submission for marking. Pick one (1) reason for a difference in the cash balance from your answer in question 2 above and answer the following questions: (i) Based on the reason you picked, explain if this difference causes an overstatement or understatement if not considered when comparing the general ledger cash balance to the balance reported by the bank. Support your answer. Example: Bank service fees would cause an overstatement of the bank balance. 1 mark (ii) Based on the reason you picked, identify the balance sheet assertion that is at risk of a material misstatement due to the difference. Explain your answer. Example: The assertion at RMM if the bank service fees would not be included is existence because the amount of cash is actually lower because the bank would have withdrawn the funds to cover the service fee. 1 mark (iii) Based on the reasons you picked, describe one (1) source of evidence that you would obtain to ensure the difference is a valid one. Do not use enquiry or confirmation as a source of evidence. Example: One source of audit evidence is to inspect the debit memo from the bank that supports the amount of service fee. 1 mark (iv) Now consider that you sent a confirmation to the bank. Identify the level of reliability you can place on the evidence received from a bank confirmation. Explain your assessment of the level of reliability. 2 marks