BDO ZIMBABWE

Audit programme
BANK AND CASH J1

Company……………………………………………………………

Year end…………………………………………………………….

General
The objectives of this programme is verify the bank and cash balances for overstatement and overdraft
balances for understatement. The programme is only a guideline and the auditor should use his or her own
initiative in preparing additional programmes that may be necessary to achieve the broad objectives above.
Overstatement of bank and cash and understatement of overdrafts are usually a result of the following:

 Disbursements recorded but cheques held until following period.

 Cash or cheques lost.
 Cash receipts misappropriated; shortages covered by delaying postings.
 Disbursements misclassified or not recorded.
 Cheques mailed but disbursements not recorded until following period.
 Disbursements recorded at wrong amount.
 Bank reconciliation changed to conceal misappropriation, eg offset against old outstanding
cheques.
 Window dressing of year end cash balances by entering into transactions that will reverse
after year end.

Therefore the following procedures are designed to address the above issues:

Performed Reference to Symbol

by Working papers (legend)
1. Prepare a lead schedule listing all bank
accounts and cash/petty cash balances that the
company holds, prior year amounts, and:
1.1 Perform analytical reviews by comparing
management accounts to budgeted amounts
for receipts, payments and balances
1.2 Explain movements and investigate any
unexpected or unusual relationships between
current year, prior year and budgeted amounts
1.3 Review interest received/paid in relation to
average cash balances and overdrafts.
1.4 Review the appropriateness of the number of
accounts that the company operates

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BDO ZIMBABWE
Audit programme
BANK AND CASH J1

Company……………………………………………………………

Year end…………………………………………………………….

Performed Reference to Symbol

by Working papers (legend)
2. Prepare and mail standard bank confirmation letters
to all banks that the company has operated accounts
with, for the current and prior year. The
confirmation letters should be sent at least two
weeks from the date by which responses are
required.
2.1 File the bank(s)’ responses and cross reference all
amounts.
2.2 Obtain bank statements for the period immediately
subsequent to period end and scrutinize for
evidence of alterations or frequent correcting
entries.
2.3 Review debits made by bank to determine their
nature.
3. For each bank account, obtain the company’s
reconciliation and perform the following:
3.1 Re-cast the reconciliation to check its arithmetic
accuracy.
3.2 Trace balance per bank to the bank statement and
confirmation letter
3.3 Agree balance per cashbook to the physical
cashbook and the general ledger.
3.4 For outstanding deposits, trace the deposits to
subsequent bank statements, recording the date
through bank. (deposits should be banked
timeously and intact)
3.5 Agree outstanding deposits to bank stamped
deposit slips.
3.6 Trace all outstanding deposits to the cashbook.
3.7 For outstanding cheques, trace a selected number
(and all material amounts) to subsequent bank
statements or cheque register.
3.8 Select material amounts from subsequent bank
statements, record dates on which the cheques were
drawn, if drawn before period end, trace them to
the list of outstanding cheques and bank
reconciliation, if stale, they should be reversed,
otherwise vouch if they are valid post period
transactions.

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BDO ZIMBABWE
Audit programme
BANK AND CASH J1

Company……………………………………………………………

Year end…………………………………………………………….

Performed Reference to Symbol

by Working papers (legend)
4. For bank transfers, transfers between the company
and its branches and Head Office should be
scheduled and items in the reconciliation
correlated.
5 Investigate any exceptional items and other
reconciling items to establish their validity and file
evidence to show that management is following up
on long outstanding reconciling items.
6 For foreign currency accounts, perform the same
steps as in 3 above.
6.1 Recalculate the Zimbabwean equivalent of the
balances using the mid-rate/official rate.
7. Controlling blank cheques and void cheques
7.1 Establish from enquiry whether responsibility for
controlling blank cheques have been assigned to
two designated employees.
7.2 Note that all blank cheques are locked up at all
times and controlled by way of a register.
7.3 Obtain a sample of voided cheques and inspect that
all voided cheques have been properly defaced
7.4 Verify that the company always retains voided
cheques in a secured location and never destroys or
disposes of void cheques.
8. To ensure that all cheques are properly accounted
for.
8.1 Inspect the cheque book currently in use.
8.2 Inspect whether the cheques are pre-numbered and
that cheques are being used in sequence.
8.3 Verify that signatories do not pre-approve cheques.
8.4 Obtain a sample of cheques before they are sent for
approval and observe that the cheques are made
payable to specific payees, not to cash, petty cash,
bearer
8.5 Note that payee names are completed in full and
8.6 abbreviations are not used
8.7 Check that all unused spaces have been cancelled.
8.8 If cheques are being handwritten, ensure that staff
uses a standard pen with non-erasable ink.

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BDO ZIMBABWE
Audit programme
BANK AND CASH J1

Company……………………………………………………………

Year end…………………………………………………………….

Performed Reference to Symbol

by Working papers (legend)
9. Petty cash
9.1 Determine the appropriateness of petty cash
expenditures in accordance with company policies
and procedures.
9.2 Judgmentally select a sample of petty cash
reimbursement vouchers and review them to
establish whether
9.3 They have been properly completed
9.4 The expenditures are appropriate
9.5 The expenditure was approved by an authorized
signatory.
10. Take note of report items

CONCLUSION

Based on work done bank and cash balances are not materially overstated and overdraft balances
are not materially understated.

Completed by: ……………………………………. Date: ……………………………

Reviewed by : …………………………………..... Date: ……………………………