In performing AR reconciliation testing, 8 reconciling items were noted. There are 3 debits and 5 credit reconciling items and each of them are individually above the defined thres... In performing AR reconciliation testing, 8 reconciling items were noted. There are 3 debits and 5 credit reconciling items and each of them are individually above the defined threshold. What is the most appropriate procedure to follow next?
Understand the Problem
The question is asking for the appropriate procedure to follow in AR reconciliation testing when specific conditions regarding reconciling items are met. It is focused on understanding which follow-up action is necessary based on the provided details about the reconciliation items.
Answer
All reconciling items, regardless of the defined threshold, are required to be tested.
The final answer is: All reconciling items, regardless of the defined threshold, are required to be tested.
Answer for screen readers
The final answer is: All reconciling items, regardless of the defined threshold, are required to be tested.
More Information
Since each of the reconciling items is above the defined threshold, a thorough review is necessary to ensure accuracy and compliance with accounting standards.
Tips
A common mistake is to ignore individual items above the threshold by focusing only on the net balance.
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