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Common Controls in Cash Audits

The document defines common controls over cash and categorizes their purposes. It lists seven common controls: segregation of duties, restrictive endorsements of customer checks, independent bank reconciliations, computerized control totals and edit tests, authorization of transactions, pre-numbered cash receipt documents and turnaround documents, and periodic internal audits. Each control is mapped to one or more categories of purpose, which are to prevent theft, ensure complete recording, prevent modification of recording, detect inaccurate balances or misstatements, and ensure unique identification and an adequate audit trail.

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Coleen Joy Sebastian Pagaling
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122 views1 page

Common Controls in Cash Audits

The document defines common controls over cash and categorizes their purposes. It lists seven common controls: segregation of duties, restrictive endorsements of customer checks, independent bank reconciliations, computerized control totals and edit tests, authorization of transactions, pre-numbered cash receipt documents and turnaround documents, and periodic internal audits. Each control is mapped to one or more categories of purpose, which are to prevent theft, ensure complete recording, prevent modification of recording, detect inaccurate balances or misstatements, and ensure unique identification and an adequate audit trail.

Uploaded by

Coleen Joy Sebastian Pagaling
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Activity 2 - Audit of Cash

Using the following categories, define the purpose of each of the common controls over cash
listed below. You may use more than one category for each control, if necessary.
NoCategories of Purposes of Each Common Control:
1. To prevent theft of cash
2. To ensure complete recording of cash
3. To prevent modification of the recording of cash
4. To detect inaccuracy of ending cash balance or misstatements therein
5. To ensure that all items are uniquely identified and that an adequate audit trail exist
for transactions
6. To serve as a deterrent for fraud

Common Controls Over Cash:


A. Segregation of duties: 1,3 & 6
B. Restrictive endorsements of customer checks. 2 & 6
C. Independent bank reconciliations by employees who do not handle cash. 4 & 6
D. Computerized control totals and edit tests. 3 & 5
E. Authorization of transactions. 1 & 6
F. Pre Numbered cash receipt documents and turnaround documents 2 & 5
G. Periodic internal audits. 6
H. Competent, well-trained employees. 2

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