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 aforementioned audit objectives are achieved. Bank confirmations| | | |
|should be sent to all banking relationships to identify accounts not included in the| | | |
|general ledger. | | | |
| | | | |
|Confirmation requests should be sent under our control and, second requests and, | | | |
|where warranted, third requests should be mailed when responses to confirmation | | | |
|requests have not been received within a reasonable time. | | | |
| | | | |
|Consider sending a special inquiry letter to ascertain the existence of special | | | |
|arrangements or restrictions, for example, compensating balance arrangements, | | | |
|security arrangements, written guarantees. | | | |
|Review confirmation replies | | | |
| | | | |
|For confirmations returned: | | | |
| | | | |
|a) agree account information and account balance to comparative summary; | | | |
|b) investigate all discrepancies reported or questions raised in review and | | | |
|determine whether any adjustments are necessary; and | | | |
|assess impact of special arrangements or restrictions identified and determine | | | |
|whether disclosure is appropriate. | | | |
|3. Test accounts where there is no confirmation | | | |
| | | | |
|In the unusual situation where we do not receive a bank confirmation and are willing| | | |
|to forego the receipt of the bank confirmation, consider performing the following | | | |
|procedures to obtain a high level of assurance that the aforementioned audit | | | |
|objectives are achieved: | | | |
| | | | |
|a) obtain subsequent month bank statement, bank reconciliation and supporting | | | |
|documentation. Consider obtaining information directly from the bank; | | | |
|b) test the mathematical accuracy of the bank reconciliation; (accuracy) | | | |
|c) trace outstanding items listed on the bank reconciliation to the subsequent | | | |
|month's bank statement and for those not traced, trace to the cash disbursements | | | |
|records for the period prior to the balance sheet date; (accuracy and | | | |
|existence/occurrence) | | | |
|d) trace deposits in transit listed on the bank reconciliation to the subsequent | | | |
|month's bank statement and for those not traced, trace to the cash receipts records| | | |
|for the period prior to the balance sheet date; (accuracy and existence/occurrence)| | | |
|e) obtain explanation for large, unusual reconciling items and trace to supporting | | | |
|documentation and/or entries in the cash records, as appropriate; (accuracy and | | | |
|existence/occurrence) | | | |
|f) review the date the above items cleared the bank or were recorded in the client's| | | |
|books to ensure appropriate recording period. Trace to supporting documentation as | | | |
|necessary; and (cut-off) | | | |
|g) investigate items such as, long outstanding items, dishonoured checks and | | | |
|significant adjustments in the subsequent month, and record adjustments as | | | |
|necessary. (accuracy and existence/occurrence) | | | |
|Test bank reconciliations | | | |
| | | | |
|Test bank reconciliation in order to obtain a moderate to low level of assurance | | | |
|that the aforementioned audit objectives are achieved by performing the following: | | | |
| | | | |
|a)test the mathematical accuracy of the reconciliation; (accuracy) | | | |
|b) trace book balances on the client's bank reconciliation to the comparative | | | |
|summary; (accuracy) | | | |
|c) trace bank balances on the client's bank reconciliation to the bank statement; | | | |
|(accuracy) | | | |
|d) test reconciling items on the bank reconciliation by performing the following: | | | |
| | | | |
|i) obtain subsequent month bank statement and supporting documentation. Consider | | | |
|obtaining information directly from the bank; | | | |
| | | | |
|ii) trace outstanding items listed on the bank reconciliation to the subsequent | | | |
|month's bank statement and for those not traced, trace to the cash disbursements | | | |
|records for the period prior to the balance sheet date; (accuracy and | | | |
|existence/occurrence) | | | |
| | | | |
|iii) trace deposits in transit listed on the bank reconciliation to the subsequent | | | |
|month's bank statement and for those not traced, trace to the cash receipts records| | | |
|for the period prior to the balance sheet date; (accuracy and existence/occurrence)| | | |
| | | | |
|iv) obtain explanation for large, unusual reconciling items and trace to supporting | | | |
|documentation and/or entries in the cash records, as appropriate; (accuracy and | | | |
|existence/occurrence) | | | |
| | | | |
|v) review the date the above items cleared the bank or were recorded in the client's| | | |
|books to ensure appropriate recording period. Trace to supporting documentation as | | | |
|necessary; and (cut-off) | | | |
| | | | |
|vi) investigate items such as, long outstanding items, dishonored checks and | | | |
|significant adjustments in the subsequent month, and record adjustments as necessary| | | |
|(accuracy and existence/occurrence). | | | |
| | | | |
|review client's bank reconciliation for review and approval by appropriate | | | |
|management and timely completion of reconciliation. | | | |

(Signature of Manager or Supervisor)