Test of Control for Cash on Hand

Control Procedures or Activities that the Company Typical Tests of the Control that the Auditor Might
Might Perform Perform
Segregation of duties– Segregation of duties
between the personnel who authorize the
-Observation
disbursement of cash on hand between who
prepares for the disbursement of it.

Transaction authorization-Proper authorization of

-Inquiry or Confirmation
cash flows (cash on hand) transactions.

Supervision- Implement proper supervision over the

-Observation
disbursement of cash on hand.

Accounting records- Establish proper accounting

-Inquiry or Confirmation
records (ledger and journals).

Access Control- Establish proper control over cash

-Observation
on hand related transactions.
Independent Verification – Establish independent
checks to identify errors and misrepresentation by
performing the following:

 Reconciling subsidiary accounts with

control accounts. ( subsidiary ledger vs -Observation
ledger)
 Review management reports that
summarize business activity over cash on
hand transactions.