(a)  Account balances
Any balances held by the bank (current, deposit or loan balances) confirmed by them. This will provide the auditor with reliable third party evidence in respect of amounts held or owed at the year end.

Assets held as security
The letter would detail any charges held by the bank over the client’s assets. This information is needed by the auditor so that he can check that adequate disclosure has been made in the financial statements.

Other assets held
This would include particulars of assets such as title deeds and share certificates. This information provides evidence substantiating the ownership and existence of other assets such as property and investments.

Outstanding interest and charges
This information substantiates the accruals figure at the year end.

(b)  (i) Cash at bank and bank loan
Reperform the year end bank reconciliation(s) and review earlier monthly reconciliations.
Agree a sample of reconciling items (e.g. unpresented cheques, outstanding lodgements) to supporting documentation and to post year end bank statements.
For outstanding lodgements check that paying-in slips are dated by the bank as pre year end.
Ensure cut-off is correct by reviewing transactions either side of the year end.
Obtain a bank confirmation letter.
Check that any accounts opened or closed during the year were authorised.
Note any rights of set-off.
Confirm details of security given for the loan and ensure disclosure of such security is adequate.
Check interest rates, terms of loan etc. to the loan agreement.
Check that loan repayments due within the next year are disclosed in current liabilities.

(ii) Cash
Review system for ensuring security of travellers’ cheques and cash.
Count floats, cash and travellers’ cheques at year end.
Verify that unbanked cash was banked after the year end.