cash & bank- control testing

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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

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saqib.khadim@hotmail.com

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Initials

Prepared b AM

Reviewed by:

where it exceeds the limit.

.

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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.

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is reimbursed on daily basis on

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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

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Notes of 50Notes of

20Notes of 10 Coins Stamps Total

Petty Expense

ReimbursedClosing Balance

A B A + B

IN HAND)

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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

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ual items.

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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

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Preparation Approval

not approved by anyone.

ts.

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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.

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Amount Bank Cheque Number

r (L&C), where approval of GM Finance & DGM Finance is required for amounts

Authorization

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Reperform casting of cash book.

Month Bank AccountBalance as per Cash

BookBalance as per Our

Calculation

CONCLUSION: Satisfactory

Source: Cash Book

Audit Step # 6

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Difference

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Vouchers are numbered sequentially but they are numbered manually.

CONCLUSION: Satisfactory

Audit Step # 7

Performance of sequential test on bank vouchers.

Source: General Ledger.

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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.

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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

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

r lock.

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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