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Chapter 10 - Cash (notes)

Chapter 10 - Cash (notes) - Chapter 10 Cash Objective in...

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Chapter 10 Cash Objective in the Audit of Cash 1. Use the understanding of the client and its environment to consider inherent risks , including fraud risks, related to cash. 2. Obtain an understanding of internal control over cash. 3. Assess the risks of material misstatements of cash and design tests of controls and substantive procedures that: Substantiate the existence of recorded cash and the occurrence of cash transactions. Determine the accuracy of cash transactions Establish the completeness of recorded cash Verify the cutoff of cash transactions Determine that the client has rights to recorded cash Determine that the presentation and disclosure of cash, including restricted funds (such as compensating balances and bond sinking funds) are appropriate. Internal Control over Cash Handling and depositing cash receipts, signing checks, investing idle cash; and maintaining custody of cash, marketable securities and other negotiable assets. Forecast cash requirements and make both short-term and long- term financing arrangements. Handled by the finance dept under direction of the treasurer. 1. All cash that should have been received was in fact received, recorded accurately and deposited promptly.
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