Basic Audit Program for Cash

A. Significance of cash to businessb. Company's policies for forecasting cash balances and investing cash surpluses

A. Trace beg bal to previous end balb. Scan entries involving cash for anything unusualc. Obtain schedules for cash on hand, foot, and agree with general ledger

A. Develop an expectationb. Compare with budgeted, previous yearsc. Calculate and compare ratios (cash / current assets)

Receipt: Vouch a sample of cash debits to remittance advice, deposits, and bank statementDisbursement: Vouch a sample of cash credits to canceled checks, voucher packets, and bank statement

Receipt: Trace a sample of remittance advices to the cash receipts journalDisbursement: Trace a sample of cancelled checks to the cash disbursements journal

Receipt: Examine a sample of deposit slips and check endorsements for proper authorizationDisbursement: Examine a sample of cancelled checks for proper authorization

Receipt: For a sample of daily deposits, foot the remittance advices and agree to cash receipts journal and bank state.Disbursement: For a sample of voucher packets, agree amounts from PO, invoice, and cash disburs journal

Receipt: Compare dates on cash receipts around year end to when the cash was deposited, to determine proper cutoffDisbursement: Compare dates on a sample of checks around year end to determine when the checks cleared the bank

Receipt: Examine a sample of remittance advices for proper account classificationDisbursement: Examine a sample of cancelled checks for proper account classification

Confirm bank account balances with banks. Use bank cutoff statement

Contact banks previously done business with for potential unknown accounts or lines of credit

Check mathematical accuracy on bank reconciliation

A. Determine if all necessary disclosures are presented in accordance with GAAP (completeness)b. Determine if cash balances are properly classifiedc. Define cash and cash equivalents