Audit for Cash

Balances
3 AGUSTUS 2020
Balance-related
Audit Objectives Detail tie-in:
Cash in the bank foots correctly and
agrees with the general ledger.
Detail tie-in Existence:
Cash in the bank as stated on the
reconciliation exists.
Cash Completeness:
Balance-related Cutoff Existing cash in the bank is recorded.
Existence
Audit Accuracy :
Objectives Cash in the bank as stated on the
reconciliation is accurate.

Cutoff:
Completeness Accuracy Cash receipts and cash disbursements
transactions are recorded in the proper
period.
Procedures Tests of the bank reconciliation include a verification that
the clients bank reconciliation is mathematically
accurate and trace checks written and recorded before
year end (outstanding checks on the bank reconciliation
or Deposits in transit)

Bank Bank
Confirmation Reconciliation

Cutoff Receipt of a cut off bank statement – a

Bank cutoff bank statement is a partial-period
Statement bank statement and the related:
1. copies of cancelled
2. checks duplicate
Receipt of a bank confirmation – bank confirmations are 3. deposit slips and
required for public entities. Sample of confirmation in 4. other documents included in bank
100% (balance account) statements mailed by the bank directly
to the CPA firms office.
 Nature of the item and available evidence
• The nature of the item has an important influence on the auditor’s
selection of audit procedures.
• For example, for the existence assertion, likely audit procedures are
physical examination, external confirmation and vouching.
• An auditor can count cash on hand or sight equipment
• If an account balance is affected by only a few large transactions, the
auditor may design substantive tests directed to the individual
transactions in order to substantiate the ending balance.

Copyright  2010 McGraw-Hill Australia Pty Ltd

PPTs t/a Auditing and Assurance Services in Australia 4e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
10-4
 Approach in auditing cash balances

• The account balance cash is directly affected by both the cash receipts and cash
payments systems.
• Accuracy of the dollar value will become an assertion of concern if transactions
involve foreign currencies.
• Much of the assessment of level of control risk will come from evaluations and tests
of controls in:
• the sales and cash receipts system,
• the purchases and cash payments system.

Copyright  2010 McGraw-Hill Australia Pty Ltd

PPTs t/a Auditing and Assurance Services in Australia 4e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
10-5
Assertions,
objectives
and
procedures
for cash
receipts and
payments

(cont.)
Copyright  2010 McGraw-Hill Australia Pty Ltd 10-6
PPTs t/a Auditing and Assurance Services in Australia 4e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Assertions, objectives
and procedures for
cash (cont.)

Copyright  2010 McGraw-Hill Australia Pty Ltd 10-7

PPTs t/a Auditing and Assurance Services in Australia 4e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
 External confirmation of bank balances

• External confirmation procedures provide evidence that the cash in the

statement of financial position exists at the balance date and that it is owned
by the entity and is not restricted or committed.
• The bank is required to confirm all details provided by the auditor as to
correctness, to list all other relevant information from details contained in its
records and to ensure that all details supplied are as at the confirmation date.

Copyright  2010 McGraw-Hill Australia Pty Ltd

PPTs t/a Auditing and Assurance Services in Australia 4e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
 Tests of a client’s bank reconciliation
• The essential objective of testing a client’s bank reconciliations is to substantiate that
the balance confirmed with the bank agrees with the client’s cash accounting records.
• The extent of testing of the client’s reconciliations varies depending on the assessed
level of control risk.
• When the level of control risk is assessed as:
• Low : substantive procedures might be confined to scanning the client
reconciliations and comparing balances per bank to bank confirmations
• High: the auditor extends the substantive procedures in testing the client’s
reconciliation by examining the individual details of reconciling items

Copyright  2010 McGraw-Hill Australia Pty Ltd

PPTs t/a Auditing and Assurance Services in Australia 4e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
10-9
Fraud-oriented Procedures
The auditor must extend the procedures
in the audit of year-end cash to determine
the possibility of a material fraud.

Extended Tests of the Bank

Reconciliation

When the auditor believes that the

The extended procedures verify whether all transactions
included in the journals for the last month of the year
were correctly included in or excluded from the bank
reconciliation and verify whether all items in the bank
reconciliation were correctly included.
year-end bank reconciliation may be
intentionally misstated, it is
appropriate to perform extended
tests of the year-end bank
reconciliation.
 ➢ All recorded cash receipts were deposited
➢ All deposits in the bank were recorded in
Proof of Cash – Audit the accounting records
Evidence ➢ All recorded cash disbursements were
paid by the bank
➢ All amounts that were paid by the bank
were recorded

Summary of Procedures Performed

1) Doing Cash Count
2) Doing Cash on Hands Roll Back
3) Confirmation Control of Confirmation in Bank
4) Get Bank reconciliation and bank statements for all accounts
5) Do Analysis of decrease or increase cash and cash equivalent
 Petty Cash

Petty cash is a unique account because

it is often immaterial in amount, yet it is
verified on many audits.

The account is verified primarily because

of the potential for embezzlement and the
client’s expectation of an audit review
even when the amount is immaterial.
 Contoh Nature of account: Petty Cash
Petty Cash
1. Method for petty cash is Imprest Fund
2. Petty Cash used to routine each department
3. Petty Cash consist of IDR Currency and USD Currency
4. When Petty Cash in minimum amount, cashier petty cash will request to fill petty cash.
5. Petty Cash usually ini General Affairs Department, Purchasing Department, QC
Departement
6. For Petty Cash limited the amount is Rp. xx per section (who handle petty cash) or depend
on agreement
 Lead schedule

Balance Balance Balance

Account Description WP Reff Per book CAJE/CRJE/PAJE/PRJE Per Audit Per Audit Movement
Code December 31, 20xx Db Cr December 31, 20xx December 31, 20x-1 Amount %
IDR IDR IDR IDR IDR IDR IDR

Cash & Cash Equivalents

Cash on Hand
1000002 Cash on Hand - US$ E-1 - - - - #DIV/0!
1000004 Cash on Hand - IDR E-7 - - - - #DIV/0!

Total Cash on hand - - - - #DIV/0!

Petty Cash
1010004 Petty Cash - IDR E-3 - - - - #DIV/0!

Total petty cash - - - - #DIV/0!

Cash in Bank
1021290 CIB-USD-BII E-10 - - - - #DIV/0!
1024000 CIB-USD-B Sinarmas E-11 - - - - #DIV/0!
1041680 CIB-IDR-BII E-9 - - - - #DIV/0!

Total Cash in Bank 0 - - - #DIV/0!

Total Cash and Cash Equivalent [TB] - - - - #DIV/0!

^ ^ ^ ^ ^
Tickmark Legend [PY]
^ Footing
[TB] Traced to trial balance, amounts in order.
[PY] Traced to prior year audited financial statements, amounts in order.
 OTHER CASH ITEMS
Checks & Postal Money Orders (PMO) for deposit (Sch __ )
Vouchers paid for replenishment (Sch ___ )
Cash Count Report
Outstanding Bill (Sch ___ )
Outstanding Bill (Sch ___ )
Amount of fund per count IDR 3 5 1 1 1 3 0 0
Amount of fund per count USD 1 0 0 1
Amount of fund per books or receipts IDR 3 5 1 1 1 3 0 0
Amount of fund per books or receipts USD 1 0 0 1
Difference USD

I hereby certify that the above fund of IDR 35,111,300 and USD 1,001 was counted in my presence by
Retno representative of KAP Dewi on Wednesday,
March 3rd 20xx at 10:30 a.m. to me intact.
 CASH ON HANDS ROLL BACK
Company PTXXX Ref:
E-1.1
Prepared by : DEW
Date: 03/03/20xx Closing date: 31/12/20xx-1
CASH ON HANDS ROLL BACK
Reviewed by: MNM Period end: 31/12/20xx-1
Date:

1 AUDIT OBJECTIVES
To assure if Cash in Hands are in correct amount

2 SUMMARY OF PROCEDURES PERFORMED

1) Obtain the balance per book as of December 31, 20xx.
2) Roll back to December 31, 20xx from March 3, 20x+1.
3) Traced to supporting document.
4) Analysis the movement.
5)Make adjustment if any.

3 AUDIT TESTING
Per Book 01/03/20_1 Per February 20_1 Per January 20x_1 Per Audit Per Book
Description Difference
March 03, 10 DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT 31/12/20xx 31/12/20xx

Cash on Hands (IDR) 35.111.352,00 20.100.360,00 28.197.504,00 464.810.824,00 442.427.263,00 320.954.714,00 303.137.896,00 3.008.117,00 3.008.117,00 -
Cash on Hands (USD) 1.001,00 - 4.765,00 20.742,00 18.732,00 39.685,00 37.490,00 1.561,00 1.561,00 -

>>> For the Documentation see Attachment 2.

4 AUDIT NOTES
None

5 CONCLUSION
Based on the audit testing cash on hands are fairly stated.
 Company Ref:
Prepared by:
E-4
Date: Closing date:
Reviewed by:
CONFIRMATION CONTROL OF CASH IN BANK Period end:
Date:

1 AUDIT OBJECTIVE
To know existence of this account is related to the company and to assure if balance per book are in appropriate amount
2 SUMMARY OF PROCEDURES PERFORMED
Prepare all bank confirmation
Compare replies to requests. Prepare, or have the client prepare, reconciliations of exceptions. Trace reconciling items to supporting documents.
Evaluate results of the tests perfomed.
3 SCOPE
Decription Amount Percentage
TB -
Confirmation sent - with TB - 100%
Confirmation replies - 100%
4 AUDIT TESTING:
Balance per Book Difference
Confirmation Number Date Sent Date Receipt REF. Remarks
(IDR) IDR

Conf. No. 01/KAP DEWI/PT ABC/XII/20xx 03/03/20_X 16/4/20_X E-3 #REF! #REF! E-4.2.1
Conf. No. 02/KAP DEWI/PT ABC/XII/20xx 03/03/20_X 16/4/20_X E-3 -
Conf. No. 02/KAP DEWI/PT ABC/XII/20xx 03/03/20_X 16/4/20_X E-3 #REF! #REF! E-4.1.1
Conf. No. 02/KAP DEWI/PT ABC/XII/20xx 03/03/20_X 16/4/20_X E-3 -
[TB] - #REF!
Attribute
NR No replies
RD Replies with diferent amount
RDR Replies with different need reconciliation
5 AUDIT NOTES
None
6 CONCLUSION
Based on the procedure performed, it can be concluded that the account is fairly stated.