You are a senior auditor on the Matheson audit and have asked Daniel Tovar, a new staff
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Question:
You are a senior auditor on the Matheson audit and have asked Daniel Tovar, a new staff member, to review the client’s controls over cash and identify any deficiencies. He has provided you with the following list.
- Checking accounts are reconciled each month by the authorized check signers.
- Incoming mail from customers is opened by two individuals. These persons prepare a listing of all checks received as the mail is opened.
- When checks are received, the mail openers stamp the back of each check with the following endorsement:
For deposit only
Matheson Company.
- Prenumbered checks are used for each account, with each checking account having its own numbering sequence.
- Checks are never made payable to cash; a specific payee must be identified on each check written.
- Voided checks are shredded immediately.
- All supporting documents (voucher, purchase requisition, purchase order, receiving report, and invoice, as applicable) are attached to each prepared check and reviewed by the authorized check signers before signing. After signing the check, the supporting documents are stamped “PAID on XX/XX/202X”.
- The authorized check signers are the purchasing department manager and assistant manager.
Indicate whether you agree that each item on his list is a deficiency and provide a brief (one or two sentences) explanation as to why you do or do not agree
Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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