Question

write an audit program for internal control of cash

Answer 1

To assess the internal control of cash we need a program to check how the cash and bank transactions take place. What are the procedures and how are they recorded. The very first step is to recognise the system of movemnet of cash for collection or payemnts. Whether the usual mode of payment is cash or bank. Who are the persons involved in making cash transactions. What are the requirements of cash in the business and how do the company assess the requirement. After assessing all of this, the persons and departments involved , the procedure and system.of movement of cash , the requirements of cash . The next step is to check how effectively these internal controls work. To check the efficiency , we can do dummy transactions and check the results. It would show the smoothness and clarity in the system. Since a lot of transactions must have been affected by bank, the cheques issued or deposited should be checked and reconciled with the bank. Who is responsible for these issues and depositions. The bank officials can be contacted for the same. The payements received and payments made should be checked with the cash records with the company . Also we need to check that what are the. Measures taken to ensure that no person withdraws money for his own use. For exmaple , the cheques issued should require two signatures for withdrawl so that no one person is in charge for this purpose . How much authority is given to the employees for cash management. So to check the internal control for cash, we need to at least include all these things. Although the program can change from business to business.