Auditing ass 3 part 3 PDF

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Identify or assume TWO (2) high level/detective internal controls and propose a control test for each control in ANY of the following processes. Cash receipt and payment Based on the preliminary analysis conducted of the environment at Sheng Siong, we will be identifying the two detective internal controls and propose a control test for the control respectively. This will be focused on the cash receipt and payment processes. Due to the environment Sheng Siong Group operates in, its operates in a supermarket industry, where a substantial amount of sales are derived from cash on a daily basis. Thus, increasing the risk of misappropriation of cash due to the high volume of cash transaction (Sheng Siong Group, 2020). With cash possessing the most liquidity among all assets, it is essential that the organisation is equipped with adequate control over this process. Thus, the detective internal controls I have identified are respectively reconciliation of cash accounts and

Detective internal controls are established to spot irregularities Control 1: Reconciliation of cash to sales, cash and bank record ,& third party documents such as credit card records, bank balance -

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Each day, the employee responsible for preparing the reconciliations should compare the day's total from the cash receipts log with the daily bank deposits and the cash held in the lockbox or safe. At the end of the month, he will print the general ledger reports for the company's cash account and compare them to the monthly totals on the cash receipt log. Any discrepancies not due to deposits in transit should be investigated and the reasons noted on the reconciliation report. Each reconciliation must be signed and dated by the person who prepared it. https://work.chron.com/internal-control-procedures-receipt-cash-6735.html

Control Test:

Control 2: a. Documentation?? - Cash registers create receipt tapes of the transactions that occurred during each shift. Warehouses maintain copies of receiving documents and transfers to store shelves. Employees use punch cards or electronic logs to record the hours they work. This documentation provides verification that inventory transactions occurred, that employees worked the hours reported and that the sales information is accurate. https://smallbusiness.chron.com/types-internal-controls-grocery-store-62145.html -

When a payment comes into the office, the cash processing clerk should immediately record the transaction into the cash receipt log and assign it an identification number. If the payer is present in the office, the clerk should issue a signed receipt listing the date and amount received. The transaction numbers must be unique and sequential so an auditor can quickly see if a cash receipt is missing from the log. If an employee

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transfers possession of a cash receipt to another employee, both parties must sign a receipt stating the date and dollar amount of the transfer. https://work.chron.com/internal-control-procedures-receipt-cash-6735.html

b. Internal Audit https://smallbusiness.chron.com/examples-internal-controls-57039.html Control Test:

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