One of the objectives for a cash audit is to verify that the recorded cash balances exist at the balance sheet date and reflect all cash and cash items on hand, in transit, and on deposit with third parties. This objective validates both the existence assertion and part of the completeness assertion. Another objective is to make sure that the recorded cash balances include all of the cash transactions that have occurred along with the effects from those transactions; this would satisfy the remaining component of the completeness assertion. A third objective is to confirm that the entity has legal title to all cash balances shown on the balance sheet at the balance sheet date. This objective validates the rights and obligations assertion. A fourth objective is to verify that the recorded cash balances are realizable at the amounts stated on the balance sheet and those amounts match supporting schedules; this would satisfy the valuation assertion. A fifth objective is to make certain that cash balances are properly identified and classified in the balance sheet and that all lines of credit, loan guarantees, and other restrictions on cash balances are appropriately disclosed. This objective substantiates the presentation and disclosure assertion. The following sections outline a list of possible audit procedures that aid in achieving the objectives mentioned.
The auditors should begin verifying cash balances by performing a few initial procedures on cash balances and records. They should trace the current period's opening balances...
... middle of paper ...
...ndependent source. In doing this, they can secure a high degree of proficient, corroborating information about the validity of the year-end bank reconciliation. This also provides additional evidence to the existence, completeness, rights and obligations, and valuation assertions for cash.
Cash should be accurately identified and classified in the financial statements. The auditors determine the correctness of the financial statement presentation from the evidence obtained from the previously mentioned audit procedures. The auditors should inquire about any evidence of restrictions on the availability of funds and make sure those restrictions are properly disclosed. In addition, the auditors should compare financial statement presentation with the applicable accounting standards. These procedures provide evidence to the presentation and disclosure assertion.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- The class learning objectives for the period of weeks three through five focused on mitigating risk in business processes through the design of internal controls. The business process covered were sales, sales returns, and cash collection processes, as well as purchases, payroll, and fixed assets. Also covered was risk prevention internal controls based on the authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and reconciliation.... [tags: Internal control, Internal audit, Audit, Auditing]
922 words (2.6 pages)
- In this case an audit firm Cardinal & Coyote LLP is confronted with a decision if they should accept n a new audit client Jost Furniture International. Sharon Rules, the managing partner of the audit firm, had been approached by Jerry Jost, the CEO of Jost Furniture, and requested the audit firm to formulate a bid for the 2010-year-end audit. Rules delegated the task to Yancy Corliss, who is a new partner in the firm. Corliss asked Lanny Beaudean to lead his team in this project. Beaudean had recently obtained his CPA license and quickly advanced to audit senior at the firm after only a few years.... [tags: Audit, Auditing, Auditor's report]
1026 words (2.9 pages)
- Future of Big Data in Audit As audit firms look to invest in big data, it will be even more critical to understand the implications of using big data and analytics on the audit profession. There are multiple ways in which data analytics would enhance the effectiveness and efficiency of external audits. From looking at the complete population, to finding trends, to allowing employees to do less routine tasks, there are multiple ways big data benefits audits. Big data would also enhance critical procedures performed for the sales and collection cycle.... [tags: Audit, Financial audit, External auditor]
1373 words (3.9 pages)
- BACKGROUND According to the audit plan approved by GARC for 2016, an internal audit was undertaken of the IT function in Auckland in April 2016. For KVB Group, most of the IT services are delegated to BancLogix System Co. Limited in Hong Kong, a fully-owned subsidiary of KVB Kunlun Holdings Limited. BancLogix provides both IT operations and application development services for the whole KVB Group. A small IT operation team is based in KVB Kunlun International (HK) Limited to provide an infrastructure level and partial application level support to the listed company and its subsidiaries.... [tags: Audit, Financial audit, Auditing, Access control]
1183 words (3.4 pages)
- Types of audits in Hospital: • Prescription Audit • Financial Audit • Quality Audit • Mortality Audit • Third Party Audit • Internal Audit • Clinical Audit Different types of auditing are done in the hospitals to check the veracity of the records and to check the adherence of the organisation to the rules laid. Prescription audit: Prescription audit consists of study of the prescriptions that are prescribed by the doctors to study the patterns of drugs prescribed and weather they follow the guidelines that are put forth by the organisation.... [tags: Auditing, Financial audit, Audit]
773 words (2.2 pages)
- A qualified financial statement contains fair representations of an organization 's financial result, condition, and cash flow which is structured to ensure the organization is in compliance with GAAP . In the standard format, an organization should follow accounting principles to comply with internal accounting systems, disclosure rules, auditor oversight, and ethics, in the event, the above-mentioned principle does not meet, an audit failure may occur. An auditor failure may result as the request of clients and senior partners did not stand firm to refuse an unethical request from the clients.... [tags: Auditing, Audit, Financial audit]
726 words (2.1 pages)
- Minutes The minutes of the June 19, 2015 meeting were approved. Presentation of PriceWaterhouseCoopers Audit Report Mr. Eric Schwartz of PriceWaterhouseCoopers (PwC) provided the Audit Committee with a presentation of the audit of fiscal 2015 consolidated financial statements of Dartmouth Hitchcock-Health and Subsidiaries. PriceWaterhouseCoopers issued an unmodified opinion on the consolidated financial statements. Areas identified for audit procedures for NLHA include entity levels controls, revenue, long-term debt, fixed assets, salaries and benefits and consideration of fraud.... [tags: Auditing, Audit, External auditor]
989 words (2.8 pages)
- The purpose of the internal audit is to protect Costco 's assets through evaluating the acceptability and efficiency of internal controls; recognizing areas of possible risk, revenue improvement and/or cost reductions; and making sure transactions are authorized, completed, and logged as proposed. The internal auditors are accountable for guiding audits of all Costco’s local and global activities, its affiliates, and other entities Costco conducts business with as deemed necessary by management.... [tags: Auditing, Internal control, Audit]
723 words (2.1 pages)
Analysis Of The Audit Files And Our Staff Accountant 's Testing For Account Balances Of City Of Proudville
- The following concerns are based on the analysis of the audit files and our staff accountant’s testing for account balances of City of Proudville. I have also provided recommendations to address these issue. Financial Accounting Issues According to Public Sector Accounting Standards Section 3150 – Property, Plant and Equipment, the cost of an asset capitalized as PPE includes any known costs such as materials and labor costs used to construct an asset or estimated costs of dismantlement, removal, or site restoration.... [tags: Auditing, Audit, Internal control, Ethics]
1039 words (3 pages)
- A reflective evaluation of the ISO9001 audit process: What happened at key points of the process? 15 I was asked to undertake an internal ISO9001 (2000) quality management audit for Company X, as a result of negative feedback from their customer. I worked with two qualified ISO9001 auditors, and was responsible for leading the team. Using the sections of the ISO9001 standard, we initially reviewed our individual strengths (we did not know each other previously), and organised a timetable of visits within the organisation for each auditor that took account of our knowledge and skills.... [tags: Auditing, Financial audit, Quality management]
1554 words (4.4 pages)