Why is the monthly reconciliation of bank accounts by an independent person an important internal control over cash balances? Which individuals will generally not be considered independent for this responsibility?

1. Explain the relationships among the initial assessed control risk, tests of controls and substantive tests of transactions for cash disbursements, and the tests of details of cash balances. Give one example in which the conclusions reached about internal controls in cash disbursements will affect the tests of cash balances.
2. Why is the monthly reconciliation of bank accounts by an independent person an
important internal control over cash balances? Which individuals will generally not be
considered independent for this responsibility?

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