How To Audit Cash | Part 1 of 3 | Bank Reconciliation, Outstanding Checks and Deposits in Transit

[@Whatimreading__]

This is extremely helpful for a first year auditor. Thank you!❤

[@BryanCarretoCPA]

I'm glad this helped!

[@jayparish]

00:01:55 Any documents received from clients - #1 Format the workpaper (WP) - each firm has their own format requirements for font, font size, structure, etc. - header - company, type of document, fiscal year 00:05:00 - #2 Materiality reference - ML - materiality - PM - performance materiality - 5% of ML - trivial threshold (5% of materiality) - calculations come from firm; each firm has their own requirements - PBC - provided by client / prepared by client - at the top of the workpaper 00:07:00 Purpose, Procedures & Conclusion - PP&C describes the goal of the workpaper and steps to achieve it - you may end up having to write this down yourself, but it facilitates with internalizing the process - more formatting - number the tabs Audit Performance Steps - APS - a form with step-by-step instructions for auditing a specific account balance - Each firm has an APS or an equivalent of it - Read it first and don’t skip any required steps

[@jayparish]

00:20:10 Bank reconciliation - Core purpose - to convert balance from cash basis to accrual basis - adds adjustments---deposits in transit, outstanding checks, and miscellaneous items---to show the proper accrual basis balance - Deposits in Transit (DIT) added - Outstanding Checks (OSC) substracted - Miscellaneous Reconciliation items added or subtracted 00:24:02 - one of the numbers is manually input instead of using a formula; if you find this during an audit, investigate further - DIT amount is above PM of 21,000, so ask client for DIT list to test it - when testing any asset balance, there is a risk that the balance is overstated - OSC amount is above PM of 21,000, so ask client for OSC list to test it 00:27:50 - miscellaneous reconciling items are often inaccurate - if the cash balance per the bank rec is materially different than the cash balance per the leadsheet, do not proceed with testing - notify the client, who should then resolve the difference before you continue testing 00:30:22 - Cross-reference items on the WP - Referred to / numbers go to - right side of number - Referred from / number comes from - left side of number - Upon finishing the WP, you’ll have a full list of what to request from the client

[@jayparish]

00:10:50 Bank reconciliation - Depository account - cash received from customers - Checking account - various uses - AP disbursement account - paying vendors, buying inventory from suppliers, etc. - always compare the account balance on the client’s detail to the account balance on the trial balance (TB); they should match - example: comparing the cash balance on the bank rec to the cash balance on the leadsheet - Lead schedule / Leadsheet - a portion of the trial balance - do not manually input the numbers in any of your WP’s that should have formulas 00:15:29 - difference between cash balance on bank rec and cash balance on TB - compare the difference to the trivial threshold (5% of ML) - the difference is below the trivial threshold and is therefore immaterial, so bank rec agrees with cash leadsheet 00:17:04 - test the underlying data of the cash leadsheet - Depository, Checking, and AP Disbursement accounts are above PM of 21,000 and must therefore be tested - Petty Cash is below PM and doesn’t need to be tested - yellow highlights - signal to reviewer that task is still in progress

[@jeremychilds2304]

Killer content Bryan! Thanks for this. These videos will be mandatory viewing for new CPA students at our firm.

[@BryanCarretoCPA]

Love to hear this! More videos are on the way, and I appreciate the support.

[@Thezazaas]

These audit videos are so helpful! Go through an entire audit and make a playlist out of it, that’d be awesome! Good stuff! 👍🏼

[@3dzilla8]

Amazing video man. I’m a newly promoted Senior, so I do know this stuff, but it’s always great to go back to basics and understand what I am actually testing (assertion wise). Also will help me train new staff

[@BryanCarretoCPA]

This means alot and congrats on your promotion. If you're new staff need help please forward them my content. Keep me updated on your career progress

[@smn1705]

I work for a big4 but still enjoyed watching it and learned a few shortcuts! Thanks

[@samabdul5432]

Thank you Bryan, I appreciate the awesome, insightful thorough Video about Cash Recs, New Staff Audit accountant, the short cuts and tying of numbers and agreeing them, and what needs to go to be requested in the OIL how you dissected and broke it down with structure gave me a good construct of how to follow through steps and confirming them with the TB.

[@QuynhTrangVu-ow9uk]

I really love your videos. They are really helpful for students who are studying auditing to understand what we have to do in practice. I hope you will make videos about auditing fixed assets and payroll as well :D

[@diorgeslomba2242]

Great video. Please keep posting accounting videos. They are very helpful!! 🙌🏻

[@ElijahEtienne]

Helped me so much during my internship!

[@linkercasas1004]

Thanks Bryan! Great concise review of the basics! Simple to understand and apply the content. Your good energy and intuitive presentation and workflow are fantastic-it kept me engaged the whole time. Great job, carnal.

[@BryanCarretoCPA]

This means everything to me!! Thank you and I hope you got something from it

[@eisenhoward1]

Every starting associate should watch these videos. Great work!

[@ishmeetkaur5364]

Your tutorials are amazing. Please keep on creating these audit tutorials

[@BryanCarretoCPA]

They are coming!!!

[@jonathanromelus5839]

This is great 👏🏾 You hit on some key topics and thank you for taking the time to really walk through the actual process. Different perspectives always helps me really grasp the objective more and this was a fresh perspective. Can't wait for more 🙌🏾👍🏾

[@KenneryChhum]

Great content! I just started a position as a first year associate and this video is really helpful. Would like to see more videos :D

[@GO-kg2dw]

I’m a third year accounting student that has yet to take audit. Thank you for this video

[@missbanusha9155]

Amazing video man ! Very helpful for associate like us . Please don't stop making such videos ❤️

[@jordanleitch407]

Great video! I hope that you keep making videos like this. It was super helpful for me and I will be sure to share it with my co-workers who are new to the auditing field!!

[@Cash4Fruit]

Love your enthusiasm! Studying for my audit exam, you reminded me this stuff is interesting and exciting to learn 😊👍🏼

[@Ghadah_Am]

Keep going, your channel is super helpful

[@lindaxiong7588]

Awesome video!! You should create a playlist for Accounting for beginners.

[@BryanCarretoCPA]

I am definitely working on it! My goal is to create a whole library on this channel where people can learn accounting and audit

[@sarthakapte7288]

Can you make a video on how to audit inventories and fixed assets

[@JellyfishHawaii]

Thank you for sharing. Love your explanation ‘, so clear. I’m going through my first busy season right now.

[@josuecatzinguzman3227]

you are the goat. thx so much bro dope content.

[@karlanunez3847]

Hi Bryan, this is super helpful for me as an audit associate, thank you very much! When you have the time, could you please teach us how to test PPE?

[@djgabrielferretti]

How do you balance a check that never got cashed out?

[@jonathanrianto4668]

Bryan, do you have editable templates for these analytical procedures testing?

[@barathragesh]

Please make a video on how to do an entire FS audit breaking it up as per different audit stages and audit of various FS captions

[@Redsox368]

Awesome video!

[@mohdshahul5743]

please make video like this for all significant accounts

[@reynaldomedrano243]

can you do a videos on how to test equity, distribution testing, management fees etc? and how to do planning analytics and how to calculate materiality?

[@lindaxiong7588]

Great video. Would like to see how to audit a mortgage that involves the principal, interest. Insurance. Since those of us who have no prior knowledge about mortgage are clueless to how to calculated the current amount owe at year end. Thanks

[@giovanniislas2754]

Great video man. Can you make a video on how to audit fixed assets and accounts payable?

[@mokeugene99]

Thanks so much for the video! It's really cool to see how Bank Reconciliations are practically done after having studied that in Intermediate for my CPA. I do have a question - you said that whatever is below the performance materiality threshold (ex. 500 for Petty Cash, PM: 21,000) you can ignore, but how could we guarantee that it is in fact lower? How do we know that it's not 3,500? Would we just do a Proof-of-Cash testing to verify that?

[@jonathanromelus5839]

Could cover capital assets and long term debt. Thanks!

[@nohakhattab2427]

Thank you so much for this video !!

[@lindaxiong7588]

Can u make a video to cover the accounting cycle. Thank you so much. Love your videos and simple explanation.s

[@kade_young7474]

Good content.Thank you.

[@pedroleon7491]

Great information 👍🇵🇪

[@pecsure]

I am a rookie Auditor. Please could you share various work paper templates?

[@jnkvngz2965]

Nice shirt man🔥

[@kennychan263]

Cash is the king

[@RVC0902]

you're amazing!

[@cj1325]

Bryan where is the fixed asset video??? lol

[@arifbaig3297]

Thanks keep going

[@mooki-gn7ho]

Hello Mr. I'm just a young guy from South Africa who want to be a CA , right now I'm doing grade 10 and I master Accounting, English as well as Mathematics. I pass Mathematics and Accounting with level 7 and English with 5 or 6. So Sir My question is , is Accounting at University more difficult than Accounting at High school? ....And I enjoy working with numbers (I always watch your videos and you inspire me). Also I want to ask you another question. Did you struggle to find a job after Graduating?

[@hasinarafenoarisoa3747]

Fascinating video! Could you share this file please?

[@hasinarafenoarisoa3747]

Could you share this file in video, please?

[@MollaTadesse-q6g]

so nice be co.

[@alexarevalos8459]

🙏🏽

[@RizzyX]

Could you share the file in the video, please?