What controls can be used:a) to make sure cash accounts are accurateb) to make sure cash receipts are appropriately recordedc) to limit access for individuals who can initiate electronic transfers of cashPlease use the illustration below to help you answer this question. Hint: Look at 'Examples of Controls' column for the answers How Control Would Be Implications if Control is NeObjective1. Cash accounts areaccurate.Examples of ControlsTestedWorkingReview evidence of manage- There might be unusualClient managementreviews monthly bankreconciliations completedby employees.ment reviews and determine cash transactions causedif evidence is persuasive that by fraud or errors. The audi-tor will prepare a year-end(e.g, review the frequency of bank reconciliation usingcontrol; determine its effec- the client's cash records anda bank cutoff statement.the reviews are effectivetiveness through reviewsof reports; and evaluatedescriptions of correctiveactions taken).Expand confirmations.2. Cash receipts areappropriately recorded.a. There is segregation ofduties between thosea. Perform a walkthroughof the processing ofcash collections. Reviewa. If there exists inadequatesegregation of dutiesbetween cash receivedand cash deposited,employees can stealcash and covering it upwith a lapping scheme.The auditor will expandhandling cash andthose recording cashtransactions.documentation providingevidence of segregation ofduties.b. Remittance advices areprepared for cash receipts. b. Same as (a).confirmations with cus-tomers, select a sample ofdaily deposits and traceto accounts receivablecredits for payments.b. Same as (a).who can initiate electronictransfers of cash.3. Limit access for individuals Appropriate proceduresexist for authorizingpasswords or other accesscodes related to initiatingReview procedures forpasswords and accesscodes and obtain relatedIf there exists lack oversightin this regard, a fraudstercould inappropriately accesscash. The auditor will reviewdocumentation.electronic transfers of cash.a list of individuals who haveaccess to initiating elec-tronic transfers of cash. Theauditor may elect to performbackground checks on someof these individuals on arandom basis, alerting allsuch individuals to this fact

Question

What controls can be used:a) to make sure cash accounts are accurateb) to make sure cash receipts are appropriately recordedc) to limit access for individuals who can initiate electronic transfers of cashPlease use the illustration below to help you answer this question.  Hint:  Look at 'Examples of Controls' column for the answers How Control Would Be Implications if Control is NeObjective1. Cash accounts areaccurate.Examples of ControlsTestedWorkingReview evidence of manage- There might be unusualClient managementreviews monthly bankreconciliations completedby employees.ment reviews and determine cash transactions causedif evidence is persuasive that by fraud or errors. The audi-tor will prepare a year-end(e.g, review the frequency of bank reconciliation usingcontrol; determine its effec- the client's cash records anda bank cutoff statement.the reviews are effectivetiveness through reviewsof reports; and evaluatedescriptions of correctiveactions taken).Expand confirmations.2. Cash receipts areappropriately recorded.a. There is segregation ofduties between thosea. Perform a walkthroughof the processing ofcash collections. Reviewa. If there exists inadequatesegregation of dutiesbetween cash receivedand cash deposited,employees can stealcash and covering it upwith a lapping scheme.The auditor will expandhandling cash andthose recording cashtransactions.documentation providingevidence of segregation ofduties.b. Remittance advices areprepared for cash receipts. b. Same as (a).confirmations with cus-tomers, select a sample ofdaily deposits and traceto accounts receivablecredits for payments.b. Same as (a).who can initiate electronictransfers of cash.3. Limit access for individuals Appropriate proceduresexist for authorizingpasswords or other accesscodes related to initiatingReview procedures forpasswords and accesscodes and obtain relatedIf there exists lack oversightin this regard, a fraudstercould inappropriately accesscash. The auditor will reviewdocumentation.electronic transfers of cash.a list of individuals who haveaccess to initiating elec-tronic transfers of cash. Theauditor may elect to performbackground checks on someof these individuals on arandom basis, alerting allsuch individuals to this fact

Accepted Answer

Control is a very important function of all types of organization. It helps in safeguarding the…

What controls can be used: a) to make sure cash accounts are accurate b) to make sure cash receipts are appropriately recorded c) to limit access for individuals who can initiate electronic transfers of cash