Question

can you share how surprise physical cash counts work?  

Answer 1

The best practice is to count cash in hand on closing and opening of a business day especially on the last day of any quarter or when financial statements are presented (to the extent it is poosible), and it is strongly advised that cash count should be made on surprise bases and at irregular interval. The process is illustrated below:

1. Select the cash drawer or cash kept at any other place whose balance is to be checked.

2. Count the cash in the drawer and record your results. Never allow the custodian of the cash being counted to leave you alone with the cash during your count. Have the custodian sign the cash count and reconciliation form.

3. Using the books of cash register tapes add up how much should have been received, according to the receipts/tapes. Enter results in the “reconciliation” part of the cash count and reconciliation form.

4. Enter on the cash count and reconciliation form the amount of cash that should be in the drawer/fund for making change.From the total monies counted, subtract the total receipts per the receipt books/register tapes, and the authorized cash change.The answer should be zero.If it isn’t, recheck the entries and math on the cash count and reconciliation form. If they’re correct, the problem is probably in the receipts.

5. Account for all the receipt numbers. Examine unused receipts that the custodian of the drawer/fund has. Make sure the unused receipts are all there, in unbroken series.

6. Check the used receipts to verify that the amounts recorded are in accordance with statutory or legal requirement.If the receipt copies are validated, check that they are validated for the proper amount and date (a sample may be used).

7. Examine all receipts that are voided or cancelled. All copies of the receipts should be there, and all should be marked “void”.

8. Notify the head of the office or department of any differences or discrepancies found during the cash count reconciliation.

9. Evaluate the internal control over cash that was observed during the examination.

10 Finally as a last step, list any improvements that might be made.