You are testing the controls over bank accounts for your audit client, Manitoba Ltd. You note that the responsibility for bank reconciliations has changed due to a corporate reorganization halfway through the current financial year. Both the staff member performing the bank reconciliations and the supervisor have changed. You are only able to talk to the current staff member and supervisor because the other staff took voluntary retirement and left the client's employment three months ago.
Required
(a) What techniques are available to you to gather evidence about the bank reconciliations? Explain how you would use each technique and comment on the quality of the evidence obtained from each.
(b) When you ask the employees responsible for bank reconciliations about how they perform the reconciliations, there is a possibility that they will not tell the whole truth about their performance of the reconciliations. Given this, will you bother to ask them? Explain.
(c) Explain the impact of the staff changes on your controls testing program.