BANK AA_Chapter_27

BANK AA_Chapter_27 - Chapter 27 Audits of Cash Balances,...

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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1 Chapter 27 Audits of Cash Balances, Bank Balances, Property, Plant and Equipment, and Investments in Financial Instruments Ch. 27 – 5 & 7
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 2 Agenda 1. Cash Balances 2. Cash Balances: Key Audit Procedures 3. Bank Balances 4. Property, Plant and Equipment 5. Investments in Financial Instruments
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 3 1. Cash Balances Internal control objectives: Prevent misappropriation of cash balances Prevent unauthorized cash payments
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 4 1. Cash Balances Key internal controls: Different cash floats; Independent staff for each cash float; Imprest system may be set up; Proper physical security, say use of safe and/or locks; Minimize the chance to make payments in cash; Regular and surprise independent cash count; and Proper insurance arrangement.
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 5 2. Cash Balances: Key Audit Procedures Count cash at year-end; and Proof of cash to reconcile cash deposits per bank statement and per accounting record.
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 6 3. Bank Balances Internal control objectives: Prevent misappropriation of bank balances Prevent teeming and lading
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© Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 7 3. Bank Balances Key internal controls Review bank statements by independent staff; Regular bank reconciliations should be performed; Bank reconciliations reviewed by senior staff regularly;
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BANK AA_Chapter_27 - Chapter 27 Audits of Cash Balances,...

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