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The Audit of Cash: Design the internal controls for cash

The Audit of Cash: Design the internal controls for cash

Study Level: Master in Accounting.

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The design of internal controls over cash typically involve these main areas:

1. Segregation of duties: Is the deposit function independent of the application of funds against customer accounts? Is the general ledger function for recording cash independent of the deposit and account crediting function?
2. Authorization: Are payment properly authorized?
3. Documentation: Are the cash transactions well documented with transaction trails?
4. Physical access: Are there physical controls that limit access to cash (petty cash), blank checks, check signing plates and so forth?
5. Independent reconciliations: Are the reconciliations completed by someone independent of cash receipts and payments?

In order to implement the above five areas, I would:

1. Have the person that opens the mail fill out a deposit slip, restrictively endorse the check and make the deposit. A copy of the ...

Solution Summary

Your response is 542 words and concentrates on procedures in five main areas involving cash receipts and cash payments. The response also mentions entity-level and general controls that impact cash handling.