AUDITOF CASH BALANCE 22 Society expects A Lot from auditors @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. 22 AUDIT OF CASH BALANCE Society Expects A Lot From Auditors
FIGURE 22-1 Relationships of Cash in the bank and Transaction Cycles pital Acquisition and Repayment Cycle Acquisition and Payment Cycle Cash in the bank an d Transaction Cycles and commissions Payment Accounts receivable Withheld income taxes @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Cash in the Bank and Transaction Cycles
Cash in the bank and Transaction Cycles d Failure to bill a customer d Billing a customer at a lower price than called for by company policy a defalcation of cash by interception of cash receipts from customers before they are recorded, with the account charged off as a dab debt Duplicate payment of a vendors invoice d Improper payments of oficers'personal expenditures d Payment for raw materials that were not received a Payment to an employee for more hours than he or she worked d Payment of interest to a related party for an amount in excess of the going rate Arens. Loebbecke: Auditing, &/E @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Cash in the Bank and Transaction Cycles ¶ Failure to bill a customer ¶ Billing a customer at a lower price than called for by company policy ¶ a defalcation of cash by interception of cash receipts from customers before they are recorded, with the account charged off as a dab debt ¶ Duplicate payment of a vendor’s invoice ¶ Improper payments of officers’ personal expenditures ¶ Payment for raw materials that were not received ¶ Payment to an employee for more hours than he or she worked ¶ Payment of interest to a related party for an amount in excess of the going rate
TYPES OF CASH ACCOUNTS 2 General cash Account Imprest Payroll Account 2 Branch bank account 2 Imprest Petty Cash Fund 2 Cash Equivalents @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. General Cash Account Imprest Payroll Account Branch Bank Account Imprest Petty Cash Fund Cash Equivalents
FIGURE 22-2 Relationship of General Cash to Other Cash Accounts Branch bank Imprest payroll accou nt account General cash Imprest Cash petty cash equivalents fund @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. FIGURE 22 -2