Cash and Bank Cycle
General
* Integrated with other cycles, focus on the controls regarding cash in those cycles
General cash controls (revenue and receipt cycle)
Controls
1. Adequate security arrangements must be made (Security company, security cameras focused on cash registers and
counting up areas, screens monitored by a security guard on an ongoing basis)
2. Should be an authorised price list on the system that should be reviewed by management on a regular basis (Standard
sales price listings of goods sold should be compared with cost prices of goods supplied from suppliers on a regular
basis)
3. All amendments to price lists must be authorised by management after management has compared them with the
calculations made by the accounting personnel. (Display date on which they were authorised, and signature)
4. Cashier uses a cash register/computer (that generates sales summary/cash reg. roll), and creates a casing up sheet
5. Cash register screens must be visible to customer to enable them to verify the selling prices registered, the total
amount due and the change to be returned. The customer serves as an external test of the accuracy, occurrence and
completeness of sales transactions.
6. Should be a notice to customers that they should insist on a receipt generated by the system (handwritten not allowed)
7. The daily amounts of the cash received should be counted by two individuals (cashier and another independent
person), who should both sign the daily cash received summary sheet as prove that the control took place.
8. The paper roll on which the cash register registers all sales must be printed by means of a key held by the supervisor or
management each time when the sales personnel change shifts.
9. Cash handed in must be entered on a cash count sheet.
10. The control total that appears on the paper roll must be entered on the cash count sheet and the cash summary sheet
11. The supervisor or management must then reconcile the cash counted, less the float, with the control total of the sales
obtained from the paper roll (the cash summary statement reflects this information per sales person).
12. Any shortages or surpluses must be discussed with the sales person immediately.
13. The cash reflected on the count sheets of all sales personnel for a given banking period, must then be entered on a cash
summary sheet.
14. Daily cash sales registers should be reconciled with cash-up receipts daily, and reviewed by a senior employee
15. The cash float in the cash register must always be a fixed amount and must remain in the till after the cash for
registered sales has been removed
16. Chief cashier reviews the cashing up sheet and takes custody of the cash, and signs as evidence of review and custody
17. All receipts are documented on a bank deposit slip by a supervisor
18. Cash is safeguarded in a secure, fireproof drop safe, with keys only to management and security company
19. Cash is collected (security company signs for acceptance of cash)- cash receipts deposited daily
20. Bank stamped deposit slip is returned: ‐ reconcile with company’s deposit slip, cashing up sheets and bank statement
21. Any differences must be brought to management’s attention immediately to be followed up
22. The person who performs the reconciliation should be a different person from the person who records the sales-
segregation of duties
23. Segregation of duties between person who receives money and person who fills in bank deposit slip
24. Deposit slip filed in sequence – regularly reviewed by an independent person
Petty cash (Study pack)
Risk
Petty cash is the most liquid asset of an organization and is easily misappropriated if business processes and controls are
not established.
General
* Integrated with other cycles, focus on the controls regarding cash in those cycles
General cash controls (revenue and receipt cycle)
Controls
1. Adequate security arrangements must be made (Security company, security cameras focused on cash registers and
counting up areas, screens monitored by a security guard on an ongoing basis)
2. Should be an authorised price list on the system that should be reviewed by management on a regular basis (Standard
sales price listings of goods sold should be compared with cost prices of goods supplied from suppliers on a regular
basis)
3. All amendments to price lists must be authorised by management after management has compared them with the
calculations made by the accounting personnel. (Display date on which they were authorised, and signature)
4. Cashier uses a cash register/computer (that generates sales summary/cash reg. roll), and creates a casing up sheet
5. Cash register screens must be visible to customer to enable them to verify the selling prices registered, the total
amount due and the change to be returned. The customer serves as an external test of the accuracy, occurrence and
completeness of sales transactions.
6. Should be a notice to customers that they should insist on a receipt generated by the system (handwritten not allowed)
7. The daily amounts of the cash received should be counted by two individuals (cashier and another independent
person), who should both sign the daily cash received summary sheet as prove that the control took place.
8. The paper roll on which the cash register registers all sales must be printed by means of a key held by the supervisor or
management each time when the sales personnel change shifts.
9. Cash handed in must be entered on a cash count sheet.
10. The control total that appears on the paper roll must be entered on the cash count sheet and the cash summary sheet
11. The supervisor or management must then reconcile the cash counted, less the float, with the control total of the sales
obtained from the paper roll (the cash summary statement reflects this information per sales person).
12. Any shortages or surpluses must be discussed with the sales person immediately.
13. The cash reflected on the count sheets of all sales personnel for a given banking period, must then be entered on a cash
summary sheet.
14. Daily cash sales registers should be reconciled with cash-up receipts daily, and reviewed by a senior employee
15. The cash float in the cash register must always be a fixed amount and must remain in the till after the cash for
registered sales has been removed
16. Chief cashier reviews the cashing up sheet and takes custody of the cash, and signs as evidence of review and custody
17. All receipts are documented on a bank deposit slip by a supervisor
18. Cash is safeguarded in a secure, fireproof drop safe, with keys only to management and security company
19. Cash is collected (security company signs for acceptance of cash)- cash receipts deposited daily
20. Bank stamped deposit slip is returned: ‐ reconcile with company’s deposit slip, cashing up sheets and bank statement
21. Any differences must be brought to management’s attention immediately to be followed up
22. The person who performs the reconciliation should be a different person from the person who records the sales-
segregation of duties
23. Segregation of duties between person who receives money and person who fills in bank deposit slip
24. Deposit slip filed in sequence – regularly reviewed by an independent person
Petty cash (Study pack)
Risk
Petty cash is the most liquid asset of an organization and is easily misappropriated if business processes and controls are
not established.
