Other Audit Procedure
1. Prior to the cash receipts reaching the accounts receivable clerk, the auditor should make a list of all cash receipts without the clerk’s knowledge. After the clerk posted cash receipts to the journal, the auditor should compare the details of the cash receipt listings he made to the detail of daily deposit tickets made by the clerk.
2. Trace a sample of customers’ accounts from journal to ledgers.
3. Investigate debit entries in the general ledger cash account other than from the cash receipt journal and examine supporting documents.
4. Trace the postings of the deposit slips to the subsidiary accounts receivable ledger.
5. Observe the accounts receivable clerk counting cash receipts, posting from journal to subsidiary ledger, and mail the deposits to the bank.
6. Obtain a cutoff bank statement
7. Compare dates and amounts of deposits in the bank statement with entries in the cash receipt journal.
8. Prepare a proof-of-cash reconciliation to reconcile the bank’s record of deposits with the client’s record of cash receipts.
9. Look for abnormal activities in the subsidiary accounts receivable ledger.
Reason for Other Audit Procedure
1. Since there’s no segregation of duties of cash receipts and record keeping, the auditor wants to make sure the clerk is not lapping client’s accounts.
2. The auditor wants to make sure all transactions were completed accurately and recorded in the period they belong to.
3. The auditor should investigate the sources of cash receipts not recorded in the cash receipt journal.
4. To determine whether the clerk is careless in performing her duties or he/she purposely carries out lapping activities.
5. To make sure clerk is not lapping accounts.
6. To test the accuracy of the year-end reconciliation of the company’s bank account performed by the controller.
7. Given the lack of internal controls, the auditor needs to verify...
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