Client Name

Process Treasury Management

Period of coverag<<period>>
Tester:
Reviewer: <<Name>>
Date of Testing:

Description. Assertions

Valuation and Allocation

Rights and Obligations
Completeness
Existence
Account Balance / Class
Sub-Process of Transactions
/Disclosure affected

Recording of 1. Cash & Bank a a a a

Cash & 2. Trade Recievables
Disbursement of 3. Trade Payables
cash

Recording of 1. Cash & Bank x x a x

Cash

Recording of 1. Cash & Bank x x a x

Cash
Recording of 1. Cash & Bank a a a a
Cash

Recording of 1. Cash & Bank x x x a

Cash

Recording of 1. Cash & Bank a x x x

Cash

Recording of 1. Cash & Bank x x x a

Cash

Cash 1. Cash & Bank a x x x

Disbursements

Cash 1. Cash & Bank a x a x

Disbursements

Cash 1. Cash & Bank a x a x

Disbursements
General 1. Cash & Bank a a x x

Cash 1. Cash & Bank a a x a

Disbursements

General 1. Cash & Bank x x a a

General 1. Cash & Bank a x x x

General 1. Cash & Bank a x x x

General 1. Cash & Bank a x x x

General 1. Cash & Bank a x x x

Investments NA a x x x
-Policies &
procedures
Investments - Investments a x x x
Accounting and
Closures
 Risk Description - "R"
"What can go wrong"

[R1.] Cash and Bank receipts and payments:

• Have been recorded (when there are non-existent
cash receipts), or have been improperly recorded
• Have not been recorded/applied
• Are not accurately recorded.

[R2.] Cash exists in bank accounts that have not been

recorded in the general ledger.

[R3.] Not all bank accounts have been recorded in the

general ledger.
[R4.] Cash stated in the general ledger does not
reconcile to the cash records/bank statement, and/or
the reconciliation contains old/ invalid items.

[R5.] Cash/bank balance denominated in foreign

currencies is translated at the incorrect foreign
exchange rate.

[R6.] Non-existent cash on hand has been recorded.

[R7.] Cash on hand is not accurately recorded.

[R8.] Electronic fund transfers and bank charges

incurred are not recorded in the general ledger.

[R9.] Cash payments are recorded when there is

insufficient cash balances and correctness of physical
cash in hand.
(situation of negative cash)

[R10.] Cash lying as imprest money with employees at

other locations/ sites are not confirmed periodically, as a
result of which expenses have not been
booked/accrued.
[R11.] Cash is not kept in a lock box and there is
unrestricted access to such cash.

[R12.] There is no authority matrix specified for

approving payments
(officials and the limits upto which they are authorised
to sign cheques and approve payments)

[R13.] All payments are not supported by adequate

documentation.

[R14.] Cheques directly collected from the customers

may not be accounted for in books in time.

[R15.] Unused critical documents like Cheques, Letter

heads etc., are not been safeguarded.

[R16.]There is no policy in place for the maximum cash

balance to be maintained at any given point of time,
which could result in misappropriation of funds .

[R17.]Large cash amounts are not handled

appropriately.

[R18.] Unsuitable or unauthorized investments may be

made. Investment may not meet the company's criteria
for making the investment.
[R19.] Investments are not appropriately classified
according to applicable accounting standards.
 Risk Control Matrix (RCM

Controls that Addresses Risk of Material

Misstatement - "C"
"How to Mitigate?"

[C1] Bank Statements Reconciled to General Ledger;

Differences Investigated and Resolved (drawn by a
person independent of cash receipt and disbursement
function, and the evidence of such verification/ review is
retained)
[C2] On a daily basis, cash receipts recorded to the
general ledger are agreed to bank deposit slips by
accounting personnel. Discrepancies are investigated
and resolved.

[C1] Bank Statements Reconciled to General Ledger;

Differences Investigated and Resolved (drawn by a
person independent of cash receipt and disbursement
function, and the evidence of such verification/ review is
retained)
[C2] On a daily basis, cash receipts recorded to the
general ledger are agreed to bank deposit slips by
accounting personnel. Discrepancies are investigated
and resolved.
[C3] Accounts Manager (Management) reviews recorded
transactions and cash position regularly for unusual
activity and investigates and resolves issues on a timely
basis.

[C4] New bank accounts are only opened through the

direction and approval of Board of Directors. When new
bank accounts are approved and opened, finance
personnel create the general ledger account and
prepare the journal entry to record the initial balance in
the account. Management reviews and approves the
new general ledger account and journal entry, including
supporting documentation, before the journal entry is
recorded.
[C1] Bank statements are reconciled to the general
ledger regularly and differences are investigated and
resolved on a timely basis.
[C5] Finance personnel analyze amounts recorded to
cash suspense accounts and prepare journal entries to
correct any unusual items. Management reviews and
approves the journal entries and supporting analysis
before the journal entry is recorded.

[C6] Cash/bank balance foreign currency translations

are prepared by finance personnel and reviewed and
approved by finance manager, who also reviews
supporting documentation for the translation rate
calculation
[C7] ERP system calculates the cash/bank balance
foreign currency translation rate, which is independently
verified by finance manager

[C8] Daily bank deposits are made for additional cash on

hand (i.e., cash on hand that exceeds the pre-
determined limit).
[C9] On a periodic basis (and without forewarning) an
employee independent of the employee(s) who handle
cash performs a count of cash on hand.
[C9] On a periodic basis (and without forewarning) an
employee independent of the employee(s) who handle
cash performs a count of cash on hand and the evidence
of such verification is retained.
[C10] Finance personnel record bank account
transactions to the general ledger on a daily basis;
finance manager reviews recorded entries and cash
position regularly for unusual activity and investigates
and resolves issues on a timely basis.
[C1] Bank statements are reconciled to the general
ledger regularly and differences are investigated and
resolved on a timely basis.

[C9] On a periodic basis (and without forewarning) an

employee independent of the employee(s) who handle
cash performs a count of cash on hand.
Management reviews and approves the journal entries
and supporting analysis before the journal entry is
recorded.
[C11] The system automatically throws up a warning
message of insufficient cash balances and does not
permit such entries to be passed.

[C12] Confirmations are obtained on a regular basis for

cash lying as imprest money and all supportings
invoices are collected periodically to ensure all
expenses are accounted for and are genuine expenses.
(none are fictitious or unauthorized)
[C13] Cash is maintained in a lock box with the access
restricted to 1 person (in his absence, access is allowed
to the FM only).
[C14] There is an authority matrix in place specifying
the names and limits upto which they are authorised to
sign cheques and approve payments.
(this authority matrix has been approved by way of a
board resolution)
[C15] The Finance personnel prepare a detailed working,
specifying the party name, expense, TDS, net pay etc.
This along with the vouchers(copy of the journal entry)
and invoice copies (supporting documentation) are
submitted to the respective persons approving the
payment, based on the authority matrix specified above.
The evidence of them having verified the working sheet,
voucher and invoice is retained.

[C16] All the cheques deposited and pending for

clearance are tracked and reviewed on periodic basis.
[C17] There is system in place to review all the
payments received directly by person independent of
Finance and any receipts not accounted for is identified

[C18] Unused critical documents and articles are

maintained in a lock box with the access restricted to
authorised person only (in his absence, access is
allowed to the FM only).
[C19] There is a policy on the maximum cash balance to
be maintained. Cash is withdrawn only when the
balance falls below a certain limit and is withdrawn to
meet specific requirements, as transactions through
cash are minimal. In case of unreasonably high
balances, they are transferred immediately.
[C20]
i) Historic account activities are reviewed on a regular
basis.
ii) All transfers to bank accounts must be authorized by
appropriate personnel.
iii) Access to transactions to creation/ performance of
transfers is segregated from approval.
iv) Compliance with security requirements regarding IT
systems for on-line trading is reviewed and approved by
appropriate personnel.

[C21]
i) Management has maintained a guidelines for making
of Investments, defining companies investment criteria
and approval processes. This is largely influenced by the
shareholders agreement entered into by the company
with the Investors.
ii) Further, all investments are held in companies name
only.
iii) Investment Register is maintained, reviewed and
updated on timely basis.
[C22]
i) Guidelines for the classification and recording of
tangible/intangible assets in accordance with applicable
accounting standards are established, communicated
and maintained.
ii) Application of Guidelines for the classification and
recording of tangible/intangible assets is monitored on a
regular basis.
 Risk Control Matrix (RCM)

Type of Sub-Process
Controls that Addresses Risk of Material Misstatement - "C"
Control Owner
"How to Mitigate?"
 Is IPE Used in
Importance of
Testing or
Assessed Risk Is Control
Fraud Risk? Frequency Performing a
(H,M,L) Automated ?
Relevant
Control?
 Test of Design, Implementation & Conclusion.
Design Gap
(Descriptive)

Control
If IPE is used, List
Design
IPE's.
Effeciency

None

None

• Automated controls on account creation is not

seen exercised through tally and it was
observed that entire accounts team has the
access to ledger creation.
None

• Reinstatement is not seen performed on a real

time basis. By performing manual exercise,
chances of missing out the Foreign currency
balances while reinstating at the year end.

None

None

None

• System does not automatically throws a

warning message of insufficient of fund and
restricts cash entries.
• Further, there can be review the day book at
periodic basis, which will highlight negative
cash cases.

• Company does not have a mechanism of

collecting confirmations from the employees of
the amount of cash due from them on periodcic
basis .
• Employee Advances are not seen reconciled
on a periodic basis. Employees who already
have an outstanding balance should not given
given advances until his previous dues are
cleared.
None

• The authority matrix should be documented

and should involve more than 1 person as the
final authority for approving payments and
should be approved in Board meeting.

None

None

None

• Company needs to have policy prescribing

maximum amount of cash balance that can be
maintained at any point of time so as to ensure
to minimize the risk associated with handling
cash.

• Company needs to have policy prescribing

maximum amount of cash balance that can be
maintained at any point of time so as to ensure
to minimize the risk associated with handling
cash.

• Company does not system of maintaining

investment register, tracking, reviweing and
updating the same on timely basis.
• There is no documented Guidelines for the
classification and recording of tangible /
intangible assets in accordance with applicable
accounting standards are established,
communicated and maintained and this is
performed as manual exercise when required.
tion & Conclusion. Testing of Operating Effectiveness.

Conclusion Testing
Walk Substantive
Design on operating Reference —
through Procedures
Implemented effectivenes Substantive
Reference Planned
s Procedures
Client Name
Area
Period of coverage:
Tester:
Reviewer:
Date(s) of walkthrough

Investments and Treasury

Activities
Initiates request to open bank accounts
Authorizes opening of new bank accounts
Adds new account information to G/L
Initiates invesment transactions
Reviews and approves investment transactions
Posts investment activity to the G/L
Reconciles Investment Accounts to amounts reported on G/L
Maintains investments (ie, stock certificates, cd's, etc)

Cash/Check Handling (Receipts, Disbursements, Reconciliation)

Activities
Receives Cash/Deposits
Reconciles Cash Receipts to Daily Cash
Prepares Bank Deposit
Takes Deposit to Bank
Records Deposit Transaction into bank ledgers
Reconciles Deposits to amounts recorded in G/L
Reviews Cash Reconciliations
Prepares Voucher Package for payment (Match P0, receiving evidence, invoice)
Prepares Cheque Requests
Approves Cheque for Payment and affixes signature
Mails Vendor Cheques
Initiates Wire Transfers
Approves Wire Transfers
Creates postive pay file and transfers to Bank
Posts Disbursements to Subsidiary ledger
Reconciles Disbursements to G/L
Reviews G/L reconciliations
Maintains Check Stock
Maintains Signature Stamp
Reconciles Bank Statements
Approves Bank Reconciliations
Employee Name Designation

Employee Name Designation