Jackie is designing the audit program for cash for her client, Dexican Services Ltd (Dexican). Dexican is a property management services company. It deals with six major clients and several smaller clients, each with a number of properties for rent in the central business district of the city. Dexican finds tenants, conducts credit checks, negotiates tenancy agreements, and arranges cleaning and maintenance services for each property. Dexican has a staff of 15 and operates from an office in the city. Other than a small petty cash amount, no cash is kept on the premises because rents are directly deposited by the tenants to Dexican’s bank account. After the relevant fees are deducted, Dexican remits the rents monthly to the property owners. These transactions pass through a bank account kept solely for this purpose. In addition, Dexican maintains a trust account (for any client moneys held on trust) and a general operating account (for salaries and other expenses).

Required

(a) Advise Jackie about the controls over cash that should be maintained by Dexican.

(b) Assuming these controls are present and operating effectively, suggest the appropriate substantive procedures for Dexican’s cash balance.