8/4/2019 Cash & Bank- Control Testing
1/25
A. F. Ferguson & Co. Lahore
Client: ABC
Period: June 30th, 2010
Subject: Short Term Investments ()
Comfort gained over controls from application of the audit comfort cycle:
1 Perform cash count & agree the balance with the athorized limit.
2 Check the closing cash balance @ day end of cash book for 12 months & note the instance
3 Scan the cash & bank book for the period (3 random months) & inquire about unusual items
4 Validate periodic preparartion & proper approval bank reconciliation statements.
5 Validate proper approval for payments as per applicable limits.
6 Validate controls over receipts and posting into the system.
7 Reperform casting of cash book.
8 Performance of sequential test on bank vouchers.9 Check that payments greater than Rs 10,000 are made through cross cheques.
10 Check that cash & cheque books are kept in a safe.
11 Checked proper approval for accounts openned & closed during the year.
Test of Controls
8/4/2019 Cash & Bank- Control Testing
2/25
mailto:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
3/25
Initials
Prepared b AM
Reviewed by:
where it exceeds the limit.
.
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
4/25
CONCLUSION: Satisfactory
Perform cash count & agree the balance with the athorized limit.
Audit Step #1
Cashier at Head Office maintains petty cash of Rs. 200,000 which
the occurrence of an expense.
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
5/25
is reimbursed on daily basis on
mailto:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
6/25
Closure DateOpening
BalancePetty Expense Cheques Notes of 1000
Notes of
500
Notes of
100
Scroll is daily prepared by the cashier & approved by DGM Finance.
Source: Cash Scroll Book
Basis: 7 random days from different months.
CONCLUSION: Satisfactory
Check the closing cash balance @ day end of cash book for 12
months & note the instances where it exceeds the limit.
Audit Step # 2
DENOMINATION (CA
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
7/25
Notes of 50Notes of
20Notes of 10 Coins Stamps Total
Petty Expense
ReimbursedClosing Balance
A B A + B
IN HAND)
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
8/25
CONCLUSION: Satisfactory, no unusal items were found.
Basis: January, March, June
Source: Cash Book
Audit Step # 3
Scan the cash & bank book for the period (3 random months) & inquire about unu
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
9/25
ual items.
mailto:[email protected]8/4/2019 Cash & Bank- Control Testing
10/25
Month Bank Account Balance as per Cash Book
CONCLUSION: Unsatisfactory
Source: Bank Reconciliation statements.
BRS are regularly prepared for all the months by the Accounts Manager but are
Audit Step # 4
Validate periodic preparartion & proper approval of bank reconciliation stateme
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
11/25
Preparation Approval
not approved by anyone.
ts.
mailto:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
12/25
8/4/2019 Cash & Bank- Control Testing
13/25
8/4/2019 Cash & Bank- Control Testing
14/25
8/4/2019 Cash & Bank- Control Testing
15/25
Validate proper approval for payments as per applicable limits.
Date Voucher # Nature
Audit Step # 5
Source: General Ledger
CONCLUSION: Satisfactory
Payements amounting to Rs.25,000 are approved by DGM Finance & Senior Managexceeding Rs 25,000.
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
16/25
Amount Bank Cheque Number
r (L&C), where approval of GM Finance & DGM Finance is required for amounts
Authorization
mailto:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
17/25
8/4/2019 Cash & Bank- Control Testing
18/25
Reperform casting of cash book.
Month Bank AccountBalance as per Cash
BookBalance as per Our
Calculation
CONCLUSION: Satisfactory
Source: Cash Book
Audit Step # 6
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
19/25
Difference
mailto:[email protected]8/4/2019 Cash & Bank- Control Testing
20/25
Vouchers are numbered sequentially but they are numbered manually.
CONCLUSION: Satisfactory
Audit Step # 7
Performance of sequential test on bank vouchers.
Source: General Ledger.
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
21/25
Date Voucher # Amount Bank Cheque No.
CONCLUSION: Satisfactory
Audit Step # 8
Source: General Ledger
Check that payments greater than Rs 10,000 are made through cross cheques.
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
22/25
8/4/2019 Cash & Bank- Control Testing
23/25
Check that cash & cheque books are kept in a safe.
CONCLUSION: Satisfactory
Audit Step # 9
Cash & Cheque books are kept in safe in the room of DGM Finance. This safe has two keys
custody of DGM Finance. One key opens the exterior lock while the other unlocks the interi
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
24/25
, one is kept with the cahier while the other is in the
r lock.
mailto:[email protected]:[email protected]8/4/2019 Cash & Bank- Control Testing
25/25
Checked proper approval for accounts openned & closed during the year.
During the year no new bank accoount is opened and no existing bank account is closed.
CONCLUSION: Satisfactory
Audit Step # 10
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]