Cash Compliance

Work Program

Project Team (list members):

Project Timing:
Date Comments
Planning
Fieldwork
Report Issuance (Local)
Report Issuance (Worldwide)

Objectives:
A. Verify existence of cash balances.
B. Verify accuracy and cutoff of cash transactions.
C. Check for off-ledger cash accounts.

Time Project Work Step Initial Index

A. Verify existence of cash balances.
1. Bank accounts: obtain copies of most recent bank
reconciliations and perform the following:
(a) Trace the book balance on reconciliation form to the
balance per the general ledger.
(b) Compare the bank balance on reconciliation form to the
bank statement. Ensure that bank account is in the
company’s name.
(c) Test the mathematical accuracy of the reconciliation.
(d) Review and obtain explanations for unusual reconciling
items.
(e) Agree deposits in transit to the next month’s bank
statement or if the next month’s bank statement is not
available, trace to supporting documentation (e.g., deposit
slip or bank receipt).
(f) List and investigate any outstanding checks of major
amount, which did not clear the bank within a reasonable
time period to ascertain that the disbursements are proper.
2. Review check signatures noting if they are appropriate
B. Verify accuracy and cutoff of cash transactions.
1. Prepare a bank transfer schedule providing column headings
for the following:
(a) Name of disbursing bank
(b) Check number or other reference
(c) Amount
(d) Date disbursed per books
(e) Date disbursed per bank
(f) Name of receiving bank
 (g) Date deposited per books
(h) Date deposited per bank
(i) Perform the following:
(1) Review the cash receipts and disbursements journals,
bank statements and related paid checks for the last 5
days before and the first 5 days after the closing date of
the period under review and list all bank transfers on the
transfer schedule.
(2) Review the schedule to determine that the deposit and
disbursement sides of each transfer are recorded in the
proper period and that any time lag between book and
bank entries appears reasonable. Agree incomplete
transfers to the schedule of outstanding checks and/or
deposits in transit.
C. Check for off-ledger cash accounts.
1. Inquire of management whether any off-ledger cash accounts
exist.
2. Review deposit slips (if used) for bank account (for one month)
and note sequential check numbers. Sequential check numbers
deposited in accounts can indicate suspicious activity.
3. Inquire if Controller or Finance Manager is familiar with all
major customers and has actually met them.
4. Inquire if any accounts are held in an employee’s name on
behalf of the company.