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Does company policy prohibit accepting checks for anything exceptmerchandise sales plus a nominal cash amount?Is a receipt produced by the cash register given to each customer?Is the reading of each cash register taken periodically by an employee who isindependent of the handling of cash receipts?Are cash counts made on a surprise basis by an individual who is independentof the handling of cash receipts?Is the reading of each cash register regularly compared to the cash received?Is a summary listing of cash register readings prepared by an employee whois independent of the physical handling of cash receipts?Are receipts forwarded to an independent employee who makes the bankdeposits?Are each day’s receipts deposited intact daily?Is the summary listing of cash register receipts reconciled to the duplicatedeposit slips authenticated by the bank?Are entries to the cash receipts journal prepared from duplicate deposit slipsor the summary listing of cash register readings?Are entries to the cash receipts journal compared to the deposits per bankstatement?Are areas involving the physical handling of cash reasonably safeguarded?Are employees who handle receipts bonded?
Audit of the Revenue and Collection Cycle: Tests of Controls and Substantive Tests of Transactions5-135-28.1.a.Existence b.Cash may be misappropriated or lapping may occur.c.Observe separation of duties and inquire of personnel about theirresponsibilities.d.For selected days, trace entries in the cash receipts journal to validateddeposit ticket, prelisting of cash receipts, and posting to accountsreceivable.2.a.Existenceb.Fictitious cash receipts may be recorded or cash receipts may bemisappropriated.c.Observe whether a prelisting is prepared and inquire of preparer aboutthe procedures followed.d.For a sample of entries in the cash receipts journal, trace to the prelistingof cash receipts. 3.a.Completenessb.Cash may be unrecorded or misappropriated.c.Observe the procedure and inquire of personnel who perform theprocedure.d.For a sample of entries in the cash receipts journal, compare prelisting tothe deposit ticket.4.a.Existenceb.Bank reconciliations may hide shortages.c.Examine bank reconciliations and determine that the preparer does nothave conflicting interests.d.Test bank reconciliations.5.a.Valuationb.A customer may take a larger discount than appropriate.c.For a sample of entries in the cash receipts journal, examine remittanceadvices for approval of discounts taken.d.For a sample of entries in the cash receipts journal, examine remittanceadvices and verify that discount taken was appropriate.6.a.Existenceb.The cashier may misappropriate a portion of the cash receipts.c.For a sample of entries in the cash receipts journal, reconcile the total tovalidated deposit tickets.d.For a sample of entries in the cash receipts journal, examine remittanceadvices.