Part (bii) for four marks required substantive procedures over the bank reconciliation and finally part.
In part (bii) many candidates focused on auditing the cash balance rather than the bank reconciliation. Hence answers such as casting the cash book, requesting a bank confirmation letter or counting the petty cash balance were not awarded any credit.
Preparation of bank reconciliations is part of the F3 Financial Accounting syllabus and therefore candidates should have considered the items which are included as part of the bank reconciliation and focused on deriving tests to audit each component.
In addition to verify if unpresented cheques and outstanding lodgements were valid reconciling items, audit procedures should have focused on inclusion in the pre year-end cashbook and post year-end bank statements. Very few candidates demonstrated an understanding of this point.