CASH COLLECTION AND SECURITY

Terms Of Reference
Subject
Cash Collection and Security
Audit Reference Number
Establishment
Aim Of Audit:
To carry out detailed checking of cash collection,
security, banking and reconciliation to the
Institutions financial accounts.
Scope Of Audit:
The examination and evaluation of the adequacy
and effectiveness of the University's system of
internal control for the collection of cash in
financial year 199?/9?
Terms Of Reference:
1. To review the reliability and integrity of financial
and operating information and the means used to
identify, measure, classify and report such information.
2. To ensure that cash collection functions are carried
out in accordance with Institutional policies and
procedures. Financial regulations and accounting
instructions should be comprehensive, generally understood
and applied.
3. To review the means used to safeguard assets (cash)
from loss.
4. To appraise the economy and efficiency with which cash
collection resources are employed.
5. To ascertain whether or not the operations and
results are consistent with the Institutional aim of
maximising cash flow.
I fully understand the aims and objectives of the audit as
explained to me by the Internal Auditor:
Signed:
Designation:
Date:

Control Objectives
The objectives of controls should be to ensure that:
1. Written instructions have been issued to and
acknowledged by all staff handling or accounting for
money.
2. Receipting stationery is adequately controlled.
3. Records are kept to ensure that income is received from
all cash points.
4. When cash is handed over a written receipt is issued at
that time.
5. Cash is securely held at all appropriate locations.
6. Collections of cash are receipted and banked promptly,
in full.
7. Reconciliation procedures correctly account for cash
receipted.
in Schools and administrative departments
Finance Department Income & Payments Office
posting to appropriate ledgers
bank statement reconciliation
Institutional financial accounts.

AUDIT PROGRAM
Subject
Audit Reference Number
Establishment
C
S
CO

Compliance Test
Substantive Test
Control Objective

C/S

Audit Test

Cash Collection and Security

CO

Method

CASH COLLECTION
S

Written instructions have

been issued to, and
acknowledged by all staff
handling or accounting for
money.

Verify the existence of

instructions for cash. Is
there any evidence of
distribution.

Receipting stationery is
adequately controlled.

Examine the system for

controlling statiotery.

Note who has obtained

receipt books. Make
arrangements to visit
those departments.
S

Records are kept to ensure

that income is received
from all cash points.

Is there a definitve list

of all cash handling points
and a system to alert the
cash office to noncollection/banking.
Is a collection and deposit
ledger maintained by a
central department
(Finance) that details
all income collected from
the various sources.

When cash is handed over,

4
a written receipt is issued
at that time.

Examine the system for

issue of receipts by the
Finance Department for
income deposited by
students, schools and
departments etc.
Examine the system for
issue of University
receipts by schools and
departments to students
etc.

Cash is securely held at

all appropriate locations.

Visit as many cash

collection locations as
possible and examine the
system for security of
cash. This should include
sitings of safes, keys,
type and amount of income
collected.

Carry out a spot check of

tills etc. verifying
receipts, x readings etc.
to cash and cheques held
at the time of the count.

Collections of cash are

receipted and banked
promptly, in full.

Reconciliation procedures
correctly account for cash
receipted.

Control objectives 6 and

7 require the auditor to
undertake detailed
transaction testing for
a recent period to ensure
that all income has been
correctly accounted for.

You will need to check:

C & D Ledger to
Till Rolls to
Paying In Slips to
Bank Statements to

Sales Ledger Postings to

Nominal Ledger Postings to
Bank Reconciliation
Take note of:
Z reading reconciliations
under and over bankings
cash flow factors
use of security firms