Audit program for cash receipts

Notify me of follow-up comments by email. Notify me of new posts by email. As such, testing the validity of various implicit managerial assertions is a key objective of an internal. Tags: Checklist Internal Audit Checklist.

Internal Audit. Internal Audit Vonya Global. Leave a Reply Cancel reply Your email address will not be published. Analytical procedures help the auditor note any obvious discrepancies or errors before performing tests of details. However, these procedures do not provide any significant assurance for the auditing team or management. These types of procedures include comparing cash balances with forecasts and budgets.

When cash balances greatly exceed or fall below expectations for the year, it should place the auditor on alert for items to look for during the tests of details. Other analytical procedures include reviewing company policies regarding minimum cash balances and the investment of surplus cash.

There are two types of tests of details that the auditor performs when auditing cash balances -- tests of details of transactions and tests of details of balances. During the tests of details of transactions, the auditor traces bank transfers and performs cash cutoff tests.

When approaching the balance sheet date, the auditor uses the cash cutoff tests to ensure that all of the appropriate transactions are included in the financial statements. Tests of details of balances include confirming bank deposits and loan amounts, obtaining bank cutoff statements to ensure all relevant cash is included in the balance, reconciling the bank account to the books, and confirming arrangements with all banks the organization uses, including those with zero balances.

An auditor may provide other types of services, other than reasonable assurance of the accuracy of a company's financial statements, to an organization. Obtain cutoff bank statement s directly from banks and trace reconciling items from bank reconciliation to cut-off statement.

Inquire as to status of inactive bank accounts. Review GL account balances and trace postings from the underlying receipts and supporting documents to the reports and journals. Compare schedule with SL accounts.

Examine the schedule footings and compare totals with the GL. Note differences between bank and book balances and verify whether reconciling items are properly recorded in the books of accounts. Prepare draft AO and discuss with management officials concerned before issuance.

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