A. F. Ferguson & Co.

Lahore Client: ABC Period: June 30th, 2010 Subject: Short Term Investments ()

Test of Controls
Comfort gained over controls from application of the audit comfort cycle: 1 2 3 4 5 6 7 8 9 10 11

Perform cash count & agree the balance with the athorized limit. Check the closing cash balance @ day end of cash book for 12 months & note the instances where it exceed Scan the cash & bank book for the period (3 random months) & inquire about unusual items. Validate periodic preparartion & proper approval bank reconciliation statements. Validate proper approval for payments as per applicable limits. Validate controls over receipts and posting into the system. Reperform casting of cash book. Performance of sequential test on bank vouchers. Check that payments greater than Rs 10,000 are made through cross cheques. Check that cash & cheque books are kept in a safe. Checked proper approval for accounts openned & closed during the year.

saqib.khadim@hotmail.com

Prepared by: Reviewed by:

Initials AM

trols

the instances where it exceeds the limit. unusual items.

Audit Step #1

Perform cash count & agree the balance with the athorized limit.

Cashier at Head Office maintains petty cash of Rs. 200,000 which is reimbursed on daily basis on the occurrence of an expense.

CONCLUSION: Satisfactory

rized limit.

0,000 which is reimbursed on daily basis on

Audit Step # 2

Check the closing cash balance @ day end of cash book for 12 months & note the instances where it exceeds the limit.

DENOMINATION (CAH IN HAND) Closure Date Opening Balance Petty Expense Cheques Notes of 1000 Notes of 500 Notes of 100

Scroll is daily prepared by the cashier & approved by DGM Finance. Source: Cash Scroll Book Basis: 7 random days from different months.

CONCLUSION: Satisfactory

MINATION (CAH IN HAND) Notes of 50 Notes of 20 Notes of 10 Coins Stamps Total Petty Expense Reimbursed Closing Balance

A+B

Audit Step # 3

Scan the cash & bank book for the period (3 random months) & inquire about unusual items.

Source: Cash Book Basis: January, March, June CONCLUSION: Satisfactory, no unusal items were found.

inquire about unusual items.

Audit Step # 4

Validate periodic preparartion & proper approval of bank reconciliation statements.

BRS are regularly prepared for all the months by the Accounts Manager but are not approved by anyone.
Month Bank Account Balance as per Cash Book

Source: Bank Reconciliation statements. CONCLUSION: Unsatisfactory

onciliation statements.

ts Manager but are not approved by anyone.

Preparation Approval

Audit Step # 5

Validate proper approval for payments as per applicable limits.

Payements amounting to Rs.25,000 are approved by DGM Finance & Senior Manager (L&C), where appr exceeding Rs 25,000.
Date Voucher # Nature

Source: General Ledger

CONCLUSION: Satisfactory

nior Manager (L&C), where approval of GM Finance & DGM Finance is required for amounts

Amount

Authorization

Bank

Cheque Number

Audit Step # 6

Reperform casting of cash book.

Month

Bank Account

Balance as per Cash Book

Balance as per Our Calculation

Source: Cash Book CONCLUSION: Satisfactory

Difference

Audit Step # 7

Performance of sequential test on bank vouchers.

Vouchers are numbered sequentially but they are numbered manually.

Source: General Ledger. CONCLUSION: Satisfactory

Audit Step # 8

Check that payments greater than Rs 10,000 are made through cross cheques.

Date

Voucher #

Amount

Bank

Cheque No.

Source: General Ledger CONCLUSION: Satisfactory

Audit Step # 9

Check that cash & cheque books are kept in a safe.

Cash & Cheque books are kept in safe in the room of DGM Finance. This safe has two keys, one is kept with the ca custody of DGM Finance. One key opens the exterior lock while the other unlocks the interior lock.

CONCLUSION: Satisfactory

has two keys, one is kept with the cahier while the other is in the cks the interior lock.

Audit Step # 10

Checked proper approval for accounts openned & closed during the year.

During the year no new bank accoount is opened and no existing bank account is closed.

CONCLUSION: Satisfactory