Your Company – Specific Risk Assessment

Audit Location: __________________________

Audit Date: ________________

SRA
CASH & ACCOUNTS RECEIVABLE

Objective: To verify controls over cash processing, receiving, posting, disbursing and reconciling are adequate to
prevent improper diversions of cash.

RISKS
1. There are excessive open bank
accounts with no activity increasing
risk for diversion of cash and lost
assets. (APS 2)
Controlled Risk
Yes No H/M
  /Low
CONTROL TECHNIQUES
Expected Control: Cash balances are monitored  
by the controller (and at a high level by the
Corporate Cash manager) to ensure that cash
balances in excess of reasonable cash
requirements is transferred to maximize overall
company interest avoidance or investment
income. Zero balance accounts are used where
available. Balances in inactive accounts or
accounts considered unnecessary are transferred
to remaining accounts and accounts are timely
closed.

2a. There is inadequate separation of
duties with respect to cash receipt,
posting and reconciliation resulting in
increased risk for cash
misappropriation. (APS 5)
Actual Control:
Expected Control: Access to cash receipts is  
minimized by use of a lock box for handling
deposits. Remittances handled directly through
the office are handled by employees independent
from accounts receivable and bank reconciliation
responsibilities and are immediately restrictively
endorsed upon receipt. Employees handling cash
are bonded to ensure that risk of loss is limited.
Receipts are deposited daily.

2b. Significant Cash receipts are not
received through the lock box, limiting
the effectiveness of lock-box controls.
(APS 5)
Actual Control:
Expected Control: The nature and significance  
of customer remittances being received and
deposited outside of lock box controls is reviewed
monthly by the controller as part of the bank
reconciliation review. At least quarterly, letters are
sent to customers not using the lock box
requesting that the lock box address be used
when sending receipts.

3. Cash receipts posted to the accounts
receivable ledger are inconsistent with
cash deposited at the bank or the total
posted to the general ledger.
Actual Control:
Expected Control: Remittances posted to the
A/R system are agreed to amounts deposited per
deposit receipts. Total deposits per bank are
reconciled to the total deposits per the cash

Prepared By: Date: 14-May-23 Page ____ of ____

Reviewed By: ___________________ Date: _________________

Audit Title and Location W/P REF. ______

 Your Company – Specific Risk Assessment
Audit Location: __________________________
Audit Date: ________________
(APS 3 & 4)
4. The bank accounts are not
independently reconciled resulting in
unidentified errors in financial
reporting or opportunities for
concealment of cash misappropriation.
(APS 3)
5. Miscellaneous cash receipts received
through the office are not supported
by a recorded accounts receivable,
allowing misappropriations of such
receipts to go undetected by other
accounting controls. (APS 5)
6. Cash receipts are applied to invoices in
a manner different than remittance
advices (or applied on account) to
conceal previously misappropriated
receipts (lapping). (APS 5)
7. Fictitious remittance information may
be entered into the system or
documents inserted into manual files
to affect inappropriate credit and
resulting refund checks (i.e.-
fraudulent over-payment refund or
refund of vendor credits). (APS 5)
8. Petty cash is not maintained in a
secure location increasing the risk for
lost cash. (APS 6)
9. Petty cash reconciliation is not
independently reviewed increasing the
risk of improper diversion of cash.
(APS 6)
10. Improper or non-business
expenditures are paid from the petty
cash resulting in lost cash. (APS 6)
Prepared By:
Reviewed By: ___________________
Audit Title and Location
account.
Actual Control:
Expected Control: Bank accounts are  
independently reconciled to the balance per the
general ledger monthly. Reconciliations are
independently reviewed and approved for
appropriateness.
Actual Control:
Expected Control: Transactions giving rise to  
future cash receipts are timely recorded as a
receivable to ensure that timely collection and
deposit of expected cash receipts can be
appropriately accounted for.
Actual Control:
Expected Control: Customer account balances  
are regularly reviewed to ensure that receipts are
being applied to specific invoices rather than as
payments on account. Customer statements are
sent to customers so that missing or
inappropriately applied receipts are subjected to
customer scrutiny.
Actual Control:
Expected Control: Access to A/R cash receipts  
programs and physical files used to process
accounts receivable billings, credits, and
remittances is restricted to individuals with related
job responsibilities who are not also responsible
for handling cash (receipts or disbursements) or
bank reconciliations.
Actual Control:
Expected Control: Petty Cash is kept in a secure  
location accessible only by the cash custodian.
Actual Control:
Expected Control: Petty Cash is independently  
reconciled.
Actual Control:
Expected Control: Petty cash is maintained as  
an impressed account. Cash disbursements are
agreed to supporting receipts or related
documents before being replenished. Funding of
Date: 14-May-23 Page ____ of ____
Date: _________________
W/P REF. ______
 Your Company – Specific Risk Assessment
Audit Location: __________________________
Audit Date: ________________

petty cash is limited only to petty cash

replenishment transactions. Release of petty cash
is supported by a petty cash disbursement
voucher that is approved only for transactions
that are reasonable and necessary to be handled
through petty cash.

Actual Control:

Prepared By: Date: 14-May-23 Page ____ of ____

Reviewed By: ___________________ Date: _________________

Audit Title and Location W/P REF. ______

 Your Company – Specific Risk Assessment
Audit Location: __________________________
Audit Date: ________________

Cash & Accounts Receivable Detail Test Work

Audit Done W/P
Pgm# Review and Testing Performed by Date Ref. Comments
1a. TRANSACTION FLOW ANALYSIS
Interview key personnel in order to prepare a detailed
Transaction Flow Narrative to document the following.
 Who receives cash, posts cash and physically deposits
cash
 Number of bank accounts and use of each account
 Bank account reconciliation process
 Petty cash procedures, security and reconciliation
 Cash application
1b. ANALYTIC REVIEW AND OTHER
 Obtain or prepare a comparative summary of the
previous four quarter-ending cash balances for analytic
review of fluctuations
Audit Test Work
2. Obtain a list of all active bank accounts and review the following:
 Number of bank accounts is not excessive and active
bank accounts have a valid purpose
 General ledger equivalent for each bank account
 Verifying authorized signers for the accounts. Ensure
that signers are current employees
(CARSRA 1)
3. Select various bank account reconciliations and review for the
following:
 Reconciliation was completed timely
 Reconciler was independent of cash handling
responsibilities or reconciliation was independently
reviewed to prevent concealment of potential cash
mis-appropriations
 There were no un-reconciled items over 3 months old
 Check mathematical accuracy of reconciliations and
supporting documentation
 Ensure that bank balances are reconciled to general
ledger balances
 Verify that deposits in transit are recorded in the
subsequent statement
 Review bank statements for transfers of funds
between accounts occurring near the balance sheet
date. Verify that the transfers were recorded in the
books in the same accounting period and that O/S
transfers in transit were appropriately reported on the
bank reconciliation.
 Identify checks that have been outstanding for a
substantial amount of time and determine status
 Determine through inquiry whether any checks drawn
before period end were released after period end

Prepared By: Date: 14-May-23 Page ____ of ____

Reviewed By: ___________________ Date: _________________

Audit Title and Location W/P REF. ______

 Your Company – Specific Risk Assessment
Audit Location: __________________________
Audit Date: ________________

 Consider agreeing the last check number issued during

the period to the bank statement or outstanding check
list to verify the completeness of outstanding checks
reported per the bank reconciliation
 If available, examine cancelled checks for proper
endorsement of payee and for proper signature
authority
(CARSRA 3 & 4)
4. Per inquiry, verify that bank account and G/L reconciliations are
done every month and that un-reconciled items are resolved.
(CARSRA 3)
5. Review Bank account activity to ensure that the source, nature,
and significance of bank statement credits are consistent with
the transaction flow narrative. Select a sample of miscellaneous
cash receipts received and deposited through the office and
verify that the receipts were appropriately supported by
independently recorded accounts receivable.
(CARSRA 2a, 2b, 5, 6 & 7)
6. Perform the following steps with the petty cash:
 Evaluate the physical security of the fund
 On a surprise basis count the petty cash in the
presence of the custodian and agree to G/L
 Review vouchers for disbursements to ensure
appropriateness of expenditure and proper approval
 Review various reconciliations to ensure they are
performed and un-reconciled items are properly
resolved (CARSRA 8, 9 & 10)

Prepared By: Date: 14-May-23 Page ____ of ____

Reviewed By: ___________________ Date: _________________

Audit Title and Location W/P REF. ______