AC11-31 Chapter 1

Question 1

two main assertions that an auditor should prove in the audit of cash

Answer 1

existence and accuracy

Question 2

the auditor also need to prove this as part of internal control

Answer 2

adequacy of internal control over cash receipts and cash disbursements

Question 3

generally, for cash items on hand, should be conducted with the element of surprise or in short without the knowledge of the cash custodian (but not applicable to big companies and organizations)

Answer 3

cash count

Question 4

should be conducted in the presence of the cash custodian such as the cashier

Answer 4

physical cash count

Question 5

should be segregated to determine the correct balance of cash

Answer 5

cash fund and non-cash fund

Question 6

-prepared and signed as proof that the cash was counted in the custodian’s presence, and that the fund was returned intact
-serves as the “confession” of the custodian if there is overage or shortage in the cash balance

Answer 6

certification by the custodian

Question 7

the cash on hand balances are below trivial

Answer 7

petty cash fund

Question 8

-some other certifications that may be acquired by the auditor (signed by the custodian) when the cash on hand balances are below trivial
-simply states the amount balance on hand

Answer 8

1. petty cash fund reconciliation form;
2. petty cash fund log or book;
3. supporting documents such as advance forms