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Internal Audit Report To Board of Directors of Romek Con-fab (Pvt) Ltd for month ended 31th December 2012.

1. VERIFICATION OF PETTY CASH
We have checked all petty cash vouchers with relevant supporting documents. Physical Cash count was carried out as at 31th January 2013 and details are as follows (Petty Cash).

Note/Coin

No of Coin/Note
Value

2000
X
1
2000.00

1000
X
1
1000.00

500
X
-
-

100
X
3
300.00

50
X
-
-

20
X
6
120.00

10 x 1
10.00

Coins X
8
8.00

Balance As Per Verification
3438.00

Balance As Per petty Cash Book 6088.00

Difference
2650.00

Reason for above difference are as follows
01/29-MOU- Mr.Samantha

Not entered at the time of cash count
650.00
01/19-Mr.W.B>Herath-Salary

-do-
2000.00
Total

2650.00
Difference (Surplus)

0

OBSERVATION
1. Petty cashier has issued IOUs when cash is given to various purposes until bills are settled and petty cash voucher is issued subsequently.
2. Petty cashier has obtained cash from main cash which is also not an acceptable internal control to practice and it has further resulted delay in depositing daily cash.

RECOMMENDATION
1. It is recommended to reimburse the petty cash vouchers as soon as possible to overcome unnecessary cash flow problems & confusions.
2. Petty Cashier should record all proceed in petty cash book at the time of it received.
3. Increase the Petty Cash Float to avoid use the daily Cash Proceeds.

02. VERIFICATION OF COLLECTION FROM SALES (Main Cash)
We have checked sales day book with relevant supporting documents & physical cash count, was carried out as at 31th January 2013.

OBSERVATION
1. Sales Proceeds have been given to the petty cashier due to delay in reimbursing petty cash bills by the Head Office.