Weaknesses in the cash, banking and accounting controls are as follows:
Cash handling and daily operation policies and procedure:
Customer cash collection procedure was not found appropriate since the money collected was used by Mrs lemos for cashing out check pays of supplier and also the employees without prior approval at her personal level.
No proper advices of the bank deposits slips are accounted for by the juann ottone the office assistant responsible for depositing the cash in bank and many are found missing. Thus no proper check has been kept.
non cooperation from the cashier regarding the provision of information of item that has been outstanding for several months
Internal audit of cash management has not been performed from last 2 years.
No proper system of management while depositing cash in bank deposits.
Compulsory leaves should be granted to the employees sitting at collection centre in a year so that there works should be reviewed within such time period and leakage should be caught well on time here Mrs lemos had not took almost any vacations.
The financial manager adolfe does not have any practical knowledge of accounts which is the essential requirement for the post.
Bank reconciliation were not approved by the management as required in the corporate guidelines since Mrs lemos does not provide details to accountants on time.
Adjustment entry at the year end was found in the bank account ledger which were made before reporting financial data to parent company.
Denial for the performance of duty by the cashier stating that the cash counting shall be allowed to external auditors.
Audit Test the auditor should perform:
Inquiry: Identifying the internal control weakness and asking the appropriate management about the controls.
Observation: Evaluating the internal control of cash
Examination or inspection of evidence: Weakness in cash receipt system’
Re-Performance: Looking for supporting documentation requirement to provide sufficient assurance
Walk through Test: Securing cash related data by going through the data provided