Audit and Assurance Practice Exam

Which document outlines all bank transfers that occur around the year-end for a client?

1. Transfer report

2. Cash flow statement

3. Interbank transfer statement

4. Bank reconciliation statement

The correct answer is: Interbank transfer statement

The interbank transfer statement is the document that specifically outlines all bank transfers that occur around the year-end for a client. This statement serves as a detailed record of transactions between different banks related to a client's accounts, capturing both incoming and outgoing transfers. Understanding this document's role is crucial in the audit process, as it provides auditors with a clear view of cash movements and balances, ensuring transparency and accurate reporting of financial transactions. By examining the interbank transfer statement, auditors can verify that funds have been correctly transferred between banks, reconcile balances, and confirm that these transactions are properly reflected in the financial statements of the client. In the context of year-end audits, this document is particularly significant, as it helps auditors assess the timing and classification of transactions within the accounting period, which is essential for accurate financial reporting.