Audit Program for Cash

In: Business and Management

Submitted By silviq26
Words 282
Pages 2
Substantive Audit Program- Cash Balances
1. The amount of cash is not materially more than the amount shown on the balance sheet. (checked with procedure 3, 5 and 7) 2. All cash has been recorded. (Checked with procedures 3, 5 and 7) 3. Cash is correctly shown as a current asset. (Checked with procedure 12) 4. Cash is not restricted to noncurrent use. (Checked with procedure 12) 5. All deposits and disbursements of cash reflect transactions before the end of the year. (Checked with procedure 2, 3, 4, 5, 6, 7)


1. All reconciliations are for valid bank accounts, obtain confirmation from a third party (Existence)
2. AOW vouched deposit in transit to the cutoff bank statement, noted it cleared the bank on january 4 2010, appears to be a valid reconciling items. (Existence)
3. AOW traced selected January deposits from the cutoff bank statement to the cash receipts journal. No other reconciling items. (Completeness)
4. AOW vouched outstanding check to cash disbursement journal and cutoff bank statements, noting the check cleared after 12/31. (Existence)
5. AOW made a selection from the cash disbursements journal and trace to the cutoff bank statement to test outstanding checks for completeness. No exceptions noted. (Completeness)
6) All outstanding checks from the cutoff statement written before year end are included on the reconciliation. (Existence)
7) All deposits from the cutoff statement made before year end are included on the reconciliation (Completeness) 8) Amounts of reconciling items are properly recorded (Valuation) 9) Bank reconciliation is properly prepared (Valuation) 10) Footing is accurate (Valuation) 11) Client is the owner of the bank statement (Rights and Obligations) 12) Cash is properly classified (Presentation and…...

Similar Documents

Cash Audit Progra,

...Internal Audit Department Audit Program for Cash | | |Audit Scope: | |Audit Objectives: | |Risks | |Cash transactions may not be recorded accurately | |Cash may not exist | |Audit Procedures |Done by |Date |W/P Ref | |Confirm selected bank accounts and special arrangements | | | | | | | | | |Select bank accounts for confirmation in order to obtain a moderate to low level of | | | | |assurance that the......

Words: 700 - Pages: 3

Audit Design Program Iii

...Audit Design Program III Tonya Gaines ACC 546 March 4, 2013 Michael De Marco Audit Design Program III During phase III of the audit plan, Anderson, Olds & Watershed (AOW) will focus on two important cycles: Inventory and Warehousing Cycle and the Cash Cycle. There are six classes of transactions in the inventory and warehousing cycle: process purchase orders, receive raw materials, store raw materials, process of goods, and store finished goods and ship finished goods. Cash account is a part of every cycle except inventory and warehousing. Cash is primarily important and extremely vulnerable to fraud that is why auditor needs to be careful in the assessing risks in auditing cash account. Anderson, Olds & Watershed’s (AOW) responsibility is to conduct a fair and unbiased audit. We will conduct these tests and procedures according to PCAOB auditing standards. There is not absolute assurance that all misstatements or errors will be discovered. Inventory and Warehouse Cycle The audit of the inventory and warehousing cycle is designed to test inventory counts, processes and operations. The classes of transactions in this cycle includes sales, value of inventory, cost of goods sold, sales returns and allowances and estimates of allowance for slow moving inventory. The table below displays the interrelationship of the transactions related to audit objectives, tests of controls, and substantive test of transaction that should be approved during the...

Words: 1179 - Pages: 5

Audit Program Design

...Audit Program Design Part III Sheila Dunn ACC 546 May 13, 2013 Cecil Lucy Audit Program Design Part III Inventory and Warehouse Cycle The inventory and warehouse cycle can be divided into five sections: acquire and record raw materials, labor, and overhead, internally transfer assets and costs, ship goods and record revenue and costs, physically observe inventory, and price and compile inventory. The following will be the tests of control, substantive tests of transactions, and analytical procedures. 1. Acquire and record raw materials, labor, and overhead a. Tests of control i. Check to make sure that all materials ordered have been accounted for ii. Check to make sure that there are records for all orders iii. Check payroll from payroll and personnel cycle iv. Check to make sure that the inventory is not overstocked b. Substantive test of transactions i. Take a sample of the orders placed ii. Make sure that the sample reflects that all material were received iii. Sample the payroll to make sure there are no discrepancies iv. Sample the inventory to make sure that it is replenished and constantly moving c. Analytical procedures i. Compare the results to prior years to ensure that the data matches up ii. Determine if there any risks 2. Internally transfer assets and costs a. Tests of controls i. Check financial statements to ensure assets were transferred ii. Check for the costs related to the......

Words: 909 - Pages: 4

Audit Program

...Cash Receipts Audit Program Objectives: 1. To ensure that all cash receipts are promptly and accurately reported. Areas To Considered: 1. Only authorized persons, with no conflicting duties, have access to cash receipts, data files, programs, and related records. 2. Customers are instructed to direct all payments to the lock box. 3. Has the location considered alternatives to the lock box for prompt utilizations of funds? 4. Remittances from the lock box are posted daily? 5. Individuals handling remittances are independent of the shipping, billing, accounting and cash disbursements. 6. Checks received at the location are restrictively endorsed upon their arrival. 7. Someone independent from the cash receipt function summarizes the cash receipt and this cash summary is compared to the validated bank deposit; to ensure that all collections were deposited intact. 8. All cash receipts journal entries are supported with validated bank deposits slips and other documentation to ensure an independent verification of cash deposits. 9. Is someone other than the individuals involved on the cash receipt function actually reconcile the bank accounts? 10. Collections are posted on the correct accounting period. |Audit Procedure/Test |Initials |Date |Reference | |Document or flowchart the cash receipt procedures and controls in place at the time of...

Words: 373 - Pages: 2

Conditional Cash Transfer Program

...Chapter 22 Conditional Cash Transfer Programs: A “Magic Bullet” for Reducing Poverty? Michelle Adato and John Hoddinott I n 1997, the government of Mexico introduced a conditional cash transfer (CCT) program called Programa de Educación, Salud, y Alimentación (PROGRESA) to provide assistance to about 300,000 extremely poor households. The essential premise of a CCT program is a cash transfer to households conditioned on their participation in health, nutrition, and education services. Ten years later, PROGRESA, now Oportunidades, covers more than 5 million households in all 31 Mexican states. Approximately 20 countries have adopted a pilot or full-scale CCT program, and another 20 countries have expressed interest in starting one. Most current programs are in Latin America, but others can be found in Asia, Africa, and the Caribbean, and interest is increasing among African countries struggling with extreme poverty and low human capital. CCT programs are increasingly perceived as being “a magic bullet in development.” Are they? This chapter presents a review of the rationale for and operation of CCT programs, an assessment of their effectiveness, and a discussion of key issues facing countries considering these interventions or reforming existing programs. How Do CCT Programs Work? CCT programs have the following characteristics: they are targeted to poor households, and the cash transfers are usually paid to mothers. Some programs also include transfers such as......

Words: 3141 - Pages: 13

Audit of Cash Balances

...Audit of Cash Balances Auditor's Assessment of the Cash Account The appropriate tests for the ending balance in the cash accounts depend heavily on the initial assessment of control risk, tests of controls, and substantive tests of transactions for cash receipts. The company's controls over cash receipts assist the auditor in determining that cash received is promptly deposited, that receipts recorded are proper, that customer accounts are promptly updated, and that the cash cutoff at year-end is proper. If the results of the evaluation of internal control, the tests of controls, and the substantive tests of transactions are adequate, it is appropriate to reduce the tests of details of balances for cash, especially for the detailed tests of bank reconciliations. On the other hand, if the tests indicate that the client's controls are deficient, extensive year-end testing may be necessary. There is a greater emphasis on the detection of fraud in tests of details of cash balances than for other balance sheet accounts because the amount of cash flowing into and out of the cash account is frequently larger than for any other account in the financial statements. Furthermore, the susceptibility of cash to misappropriation is greater than other types of assets because most other assets must be converted to cash to make them usable. This emphasis affects the auditor's evidence accumulation in auditing year-end cash as in these examples: < ......

Words: 2627 - Pages: 11

Audit Program

...SECOND LIFE CONSULTING XYZ Company First Floor Physical Security Audit As of December 2, 2013 W/P# A4 Prepared by: F.C. Date: 12/02/13 Reviewed by: F.C. Date: 12/04/13 SUMMARY OF AUDIT FINDINGS W/P # C1 FINDINGS The glass construction of the doors and walls of the building does not safeguard privacy of the building's interior. There are only two cameras to cover four entrances and exits on the first floor. The two available cameras do not function properly. RECOMMENDATION Tint the glass of the building's exterior to ensure privacy of building's interior. Install a camera at each entrance and exit. C2 C2 Make sure the cameras are online and have the capability to rotate to cover wider range of area. Properly train receptionists and security personnel to recognize employees, VIPs, janitors and visitors and inquire about an individual's identification when necessary. Keep a traceable physical or digital logbook for walk in guests. Fill out time of arrival, name, reason for visit and expected visit duration. Increase security personnel by 50 percent and ensure proper training is provided. Implement a policy and procedure on badge issuance and properly communicated such policy to all security personnel Implement a policy and procedure on badge issuance and assign appropriate employee to be held accountable for lost logbook. Logbook should be safeguarded and reconciled regularly to ensure all issued badges are accounted for. Implement a policy and procedure on badge...

Words: 997 - Pages: 4

Audit Program Design

...Audit Program Design Part III Tywana Bowman University of Phoenix ACC545/Financial Accounting Professor Michael DeMarco September 26, 2010 Introduction In order to conduct a substantial audit of Apollo Shoes the auditor must obtain a sufficient understanding of the entity and the entity’s environment, including the internal control. The understanding of the entity and its environment helps the auditor in a variety of ways throughout the audit, including establishing materiality, considering appropriateness, and designing audit procedures that can facilitate the growth of Apollo Shoes. Before the auditor can begin the process of conducting the audit of the inventory and warehousing cash cycles, the auditor must prepare the audit plan and program for Apollo Shoes. Developing the audit strategy and plan aids the auditor in determining the necessary resources to perform the engagement. The auditor must develop a plan in mind that will reduce audit risk to an acceptable level for the inventory and warehousing cash cycle. The audit plan should include a description of nature, timing, and extent of the planned risk assessment procedures. The audit plan and program significantly affects the types and extent of further audit procedures to be used by the auditor in determining whether the financial statements are fairly stated in accordance with the US GAAP. The auditor should consider audit risk in relation to the individual account balances, classes of transactions, and......

Words: 1093 - Pages: 5

Apollo Shoes Cash Audit

...Date: 19 JAN 2015 15:37:42 +0000 From: "Darlene Wardlaw" Subject: Audit of Cash We received the bank confirmation and bank cutoff statement this morning. I left it in your mailbox at work. I would prefer that you audit cash rather than Bradley (let him stick to vouching documents to keep him out of trouble). A couple of points: 1. Don’t forget to trace from the cutoff bank statement to the outstanding check list to make sure that the listing is complete. 2. There was an adjustment made at the end of the year to other income that looks odd. If I remember correctly, there was a transaction in investments for the same amount. You may want to take a closer look. 3. The last check written in December was check number 3621. They use duplicate checks so I was able to look at the carbons when I was out at Apollo on Saturday. Talk to you soon. DW STANDARD FORM TO CONFIRM ACCOUNT BALANCE INFORMATION WITH FINANCIAL INSTITUTIONS Apollo Shoes, Inc CUSTOMER NAME FINANCIAL INSTITUTION'S NAME AND ADDRESS Twenty First National Bank Post Office Box 1 Shoetown, ME 00002 We have provided to our accountants the following information as of the close of business on 12/31/2014, regarding our deposit and loan balances. Please confirm the accuracy of the information, noting any exceptions to the information provided. If the balances have been left blank, please complete this form by furnishing the balance in the appropriate space......

Words: 2103 - Pages: 9

Cash for Clunkers Program

...Cash for Clunkers Program The Car Allowance Rebate System (CARS), colloquially known as "cash for clunkers", was a $3 billion U.S. federal scrap page program intended to provide economic incentives to U.S. residents to purchase a new, more fuel-efficient vehicle when trading in a less fuel-efficient vehicle. The Cash for Clunkers program that was pitched to the public as a big boost for the economy and the environment turned out to be nothing much of an advantage. It did little help to the environment and was "far more expensive as per the job created than alternative fiscal stimulus programs." according to new research led by Ted Gayer and Emily Parker of Brookings. The program initially made progress in giving a jump start to the auto industry but later not that much of a use to anyone. Initially the program offered $3,500 to $4,500 for people who trade in their old cars for a new car with higher fuel economy. Like for example the fuel economy requirements ended up being fairly loose. Like a Hummer could be traded for a voucher of $3,500 that would go towards a new SUV with better mileage. Experts argue that the small gains made in efficiency would offset by the energy cost in manufacturing a new car would. According to an article published on Fox news website in November 2013, Americans traded about 700,000 "clunkers" between July and Aug 24, 2009. This program only provided a small bump in vehicle sales, where as the government thought this could be done in a...

Words: 530 - Pages: 3

B Audit Cash Balance

...ASSIGNMENT 2 AUDIT CASH BALANCE APPLE BLOSSOM COLOGNE COMPANY The Apple Blossom Cologne Company has two bank checking accounts. The general account (account number 101) is with the Big City National Bank, Main at Michigan Avenue, Chicago, Illinois. It is used for ordinary cash receipts and disbursements transactions. The payroll account (102) is with the Second National Bank, 615 Lakeway Road, Chicago, Illinois. The payroll account is not an imprest account, and transfers between it and the general account occur frequently. All transfers are journalized through the cash receipts journal. SUBSTANTIVE AUDIT PROCEDURES FOR CASH BALANCE Lillian Stockton, the treasurer, prepares monthly bank reconciliations for both bank accounts. You obtained from Don McKenna a copy of the reconciliations for each bank for the month of December, 2011. You also obtain from Don selected portions of the cash receipts and cash disbursements journals. You have received from the banks the confirmations and cut-off bank statements that were requested January 3, 2012. The cut-off bank statements cover the period from January 1 to January 14, 2012. On December 31, 2011, you were on the client’s premises for the purpose of counting any undeposited cash receipts and the petty cash fund at year-end. The cashier, Pam Lewis, has charge of the petty cash fund. You obtain control of it, counted it, recorded your count, and returned it to Pam, obtaining a receipt for its return. Pam also prepares......

Words: 3441 - Pages: 14

Audit Program Design

...Internal Audit of Al Fresco Audit Program Objective: To find out whether their financial information is free from irregularities. Audit Steps to Be Completed I. Planning and Administration Section 1. Prepare permission letter and engagement letter, and obtain approval from the audit director and the auditee. 2. Conduct audit planning, and the following should be discussed: * Timing of audit and planned participants * Timing of fieldwork * Internal control checklist * Risk areas/ internal controls * Assignment of audit objectives * Testing to be performed * Budgeted hours * Permission letter * Engagement letter 3. Conduct pre-audit interview with auditee and document discussions held. 4. Set the schedule of the preliminary audit with the applicable management and discuss the following: * Timing of the audit * Audit objectives * Key contacts for the audit 5. Obtain permission to access relevant information like: * Organizational chart * Relevant reports utilized by the auditee * Strategic documents 6. Prepare and review the internal control questionnaire: * What is the Al Fresco’s perceived internal controls strengths and weaknesses? 7. Inquire of the auditee as to whether any relevant process flowcharts exist. If not, consider developing one for the permanent file. II. Fieldwork First Objective: To ascertain whether the use and recording of petty cash funds......

Words: 683 - Pages: 3

Audit Program Design

...Audit Program Design ACC/546 Chandria Willis August 3, 2015 Frank G. Elliot Apollo Shoes, Inc. Langley, ME Dr Mr. Elliot, We have developed test o controls of substantive test of transactions, and analytical procedures for the audit of Apollo Shoes Inc.’s sales and collection cycle, payroll and personnel cycle, acquisition and payment cycle, and Inventory and Warehousing cycle in line with the generally accepted auditing principles. The objective is to verify existence, accuracy and completeness. A substantive test should be associated with each of the transactions related to the audit objectives. The objectives of the audit include the occurrence, accuracy, completeness, posting, classification, summarization, and timing. Analytical Procedures must be performed in the planning stage of the audit and reviewed near the end of the audit. This serves to provide additional assurance to the auditor that the account has also been presented fairly in line with the generally accepted accounting principles. Based on previous research, it is our......

Words: 1469 - Pages: 6

Audit Cash and Investments Audit

...AUDITING CASH AND INVESTMENTS 1. CASH Audit objects : - existence  recorded cash balances exist at the balance sheet date. - completeness  recorded cash balances include the effects of all cash trans-actions that have occurred; year – end transfer of cash between banks are recorded in the proper period. - rights and obligations  the entity has legal title to all cash balances shown at the balance sheet date. - valuation  recorded cash balances are realizable at the amounts stated on the balance sheet and agree with supporting schedules. - presentation and disclosure  cash balances are properly identified and clas-sified in the balance sheet; lines of credit, loan guarantees and other re-strictions on cash balances are appropriately disclosed. !!! REMARKS: o A high volume of cash transactions result in a high inherent risk. o Controls over cash transactions are usually strong and are tested in connec-tion with the audits of sales and purchases. o Regular bank reconciliations are an important control over the prevention and detection of fraud and error. o The use of “imprest” accounts for petty cash and for payroll and dividend cheques is a further control over safeguarding cash balances. o Cash balances are usually relatively small but significant because of their importance for liquidity. o The small balance means that auditors tend to adopt a predominantly sub-stantive approach to the audit of cash balances. o Analytical procedures are little used......

Words: 1397 - Pages: 6

Audit Strategy and Audit Program Project

...Audit Strategy and Audit Program 1) Inspection of Records and Documents a. Nature: To examine the various records (called Documentary Evidence) that support the activities of a business and its accounting information system. b. Purpose: To determine if records are to be considered reliable and if so, whether to use them in the audit. c. Engagement risk is increased: The auditor would want to want to place a heavier reliance on documents prepared or reviewed by those outside of the business (ex: the bank associated with the business). d. Inherent risk is increased: The determination of reliability must be done with a much greater deal of care, as there is now a higher chance of material misstatement. e. Control risk is decreased: The auditor would be able to place a heavier reliance on documents created and used internally (i.e. not reviewed by outsiders). 2) Inquiry of knowledgeable persons within or outside the entity a. Nature: To obtain sources of information (ex: personnel, attorneys, customers, etc.) upon which the auditor may make inquiries pertaining to various aspects of the audit engagement. b. Purpose: To gain insight on the material upon which a business is being audited. c. Engagement risk is increased: The need for written representation from clients becomes much higher. As there is an increased risk of liability, oral representation would not provide the evidence needed to prove innocence. d. Inherent risk is increased: The auditor would pay......

Words: 938 - Pages: 4