How Control Would Be Implications if Control is Ne Objective 1. Cash accounts are accurate. Examples of Controls Tested Working Review evidence of manage- There might be unusual Client management...

What controls can be used:

a) to make sure cash accounts are accurate

b) to make sure cash receipts are appropriately recorded

c) to limit access for individuals who can initiate electronic transfers of cash

Please use the illustration below to help you answer this question.
Hint:  Look at 'Examples of Controls' column for the answers

Extracted text: How Control Would Be Implications if Control is Ne Objective 1. Cash accounts are accurate. Examples of Controls Tested Working Review evidence of manage- There might be unusual Client management reviews monthly bank reconciliations completed by employees. ment reviews and determine cash transactions caused if evidence is persuasive that by fraud or errors. The audi- tor will prepare a year-end (e.g, review the frequency of bank reconciliation using control; determine its effec- the client's cash records and a bank cutoff statement. the reviews are effective tiveness through reviews of reports; and evaluate descriptions of corrective actions taken). Expand confirmations. 2. Cash receipts are appropriately recorded. a. There is segregation of duties between those a. Perform a walkthrough of the processing of cash collections. Review a. If there exists inadequate segregation of duties between cash received and cash deposited, employees can steal cash and covering it up with a lapping scheme. The auditor will expand handling cash and those recording cash transactions. documentation providing evidence of segregation of duties. b. Remittance advices are prepared for cash receipts. b. Same as (a). confirmations with cus- tomers, select a sample of daily deposits and trace to accounts receivable credits for payments. b. Same as (a). who can initiate electronic transfers of cash. 3. Limit access for individuals Appropriate procedures exist for authorizing passwords or other access codes related to initiating Review procedures for passwords and access codes and obtain related If there exists lack oversight in this regard, a fraudster could inappropriately access cash. The auditor will review documentation. electronic transfers of cash. a list of individuals who have access to initiating elec- tronic transfers of cash. The auditor may elect to perform background checks on some of these individuals on a random basis, alerting all such individuals to this fact