Internal Audit Checklist For a Cash Business

Utilizing a financial audit checklist ensures precision, accuracy, and reliability during internal auditing processes. Furthermore, using one helps prevent auditors from becoming sidetracked by issues outside their purview of examination.

An audit checklist for cash handling helps businesses ensure proper procedures are being adhered to in order to avoid theft and fraud. The list includes conducting surprise cash counts, verifying bank deposit slips match store settlement sheets and more.

1. Counting Cash
Cash businesses require efficient cash handling practices, including monitoring cash drawers closely and preventing shortages from theft or inaccurate counting; as well as verifying POS reports match up with how much cash has actually been deposited in bank.

As part of your internal audit, conduct regular counts on every cash drawer at least once every day or every other shift. Be sure to do this in a private area to reduce theft risks and ensure there are no discrepancies between POS reports and cash register reports.

If there’s any disagreement in your company, it is crucial that it is investigated immediately. Not only will this help prevent loss of money; but it will also demonstrate to employees that their work gets reviewed and reported upon; encouraging adherence to company policy.

2. Recording Cash Receipts
Cash payments should always be documented immediately upon being received, whether from customers for products, services or invoices or from suppliers as payments make the accounting record simpler to trace any theft of money.

A cash receipts journal must include columns for date, transaction description, amount received and accounts credited. At the end of each month these entries should be totalled up and totalled up again so as to update general ledger cash account balances.

Businesses should keep records of cash receipts, but in addition to that they should deposit it regularly into the bank (daily or weekly) so as to reduce risk. Doing this helps minimize loss.

Segregation of duties should be employed in order to protect both cash resources and ensure they don’t get misappropriated; additionally it prevents individuals who handle cash from misusing it for personal expenses.

3. Reconciling Cash Balances with the Bank
Cash reconciliation is essential in ensuring the company’s internal ledger and bank statement match up, to prevent small errors from becoming bigger problems over time. Reconciling payments made accidentally or fraudulently also helps businesses detect any payments made that were either incorrectly processed or made fraudulently.

Comparison is made by comparing the end balance in your company’s general ledger with its beginning balance on your bank statement for the same period, taking into account deposits in transit, outstanding checks and any differences such as interest earned, bank service fees or non-sufficient funds (NSF) charges that might exist.

To prevent fraud and ensure accuracy, the person reconciling a bank account should not also receive cash or deposit it – this allows for segregation of duties and reduces theft risk. Furthermore, companies should make regular deposits into accounts to minimize chances of their funds or checks being stolen from within business premises.

4. Training Employees
Internal auditing requires thorough assessments, so having an audit checklist can be an indispensable asset in helping your company conduct extensive inspections of operations and processes. An audit checklist is an excellent way to help achieve financial accuracy, comply with regulations or enhance efficiency within an organization – helping it reach its goals more quickly.

Internal audit checklists that are effective are those which cover all the essentials, including segregation of duties (i.e. ensuring no one who receives cash is also depositing it or reconciling accounts), employee training for their positions and so forth.

Once your internal audit checklist is completed, use it as a benchmark to measure future performance and get motivated about improving processes or getting ready for ISO 9001 certification. Like reviewing game film after a loss, an audit checklist helps your team keep its eye on the task at hand and stay focused.