Cash & Bank- Control Testing

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


2/25

[email protected]
mailto:[email protected]:[email protected]


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]


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.


5/25

is reimbursed on daily basis on


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.


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]


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]


8/25

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]


9/25

ual items.
mailto:[email protected]


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]


11/25

Preparation Approval

not approved by anyone.

ts.
mailto:[email protected]:[email protected]:[email protected]


12/25


13/25


14/25


15/25

Validate proper approval for payments as per applicable limits.

Date Voucher # Nature

Audit Step # 5

Source: General Ledger


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]


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]


17/25


18/25

Reperform casting of cash book.

Month Bank AccountBalance as per Cash

BookBalance as per Our

Calculation


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]


19/25

Difference
mailto:[email protected]


20/25

Vouchers are numbered sequentially but they are numbered manually.


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]


21/25

Date Voucher # Amount Bank Cheque No.


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]


22/25


23/25

Check that cash & cheque books are kept in a safe.


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


24/25

, one is kept with the cahier while the other is in the

r lock.


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.


Audit Step # 10
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

Documents

Cash & Bank- Control Testing