Substantial Procedures Vouching of Cash Transaction

Internal Check in terms of Cash Receipts

If there is no well organized internal check system then there is a lot of chances to misappropriation of cash.so the follwing system in terms of cash receipts is suggested

1.when cash is received it should be acknowledged through printed receipt which should have counterfoil or carbon copy.
2.when cash is received it should entered in rough cash book or diary ASAP.

3.Automatic tails or cash register is very useful in terms of checking receipts.
4.All the receipts of the day must be deposited to the bank at the end of the bank or on the following morning
5.Cashier should frequently prepare Bank reconciliation statement.

6.pretty cash should be organized through Imp-rest system  
7.before a cheque is issued it should be presented along with the account of payee to a responsible officer.
8.Casting of cash  book should fairly checked.
9.Internal control over the wages sheet should be exercised.
10.All payment is as far as possible but Pretty cash should be made by cheques. 

11.Director  should  sanction payment of special nature cashier should not do so.

 

Substantial Procedures Vouching of Cash Transaction

The main objects of vouching or auditing of a cash book:

1.to ensure all the receipts are accounted for
2.to ensure that no fraudulent payment have been made
3.to justify both cash book and bank statement
4.to ensure that all receipts and payments are properly recorded.

Now at first we have to know what is Voucher and what is Vouching ?

Voucher:A voucher is a documentary evidence which is used to support a transaction in a books of account.

Vouching:The act of establishing authenticity and accuracy of all entries in a account book is called Vouching

Some important point when auditing a voucher which a auditor must kept in mind:

1.All the voucher should be consecutively arranged.because if all the vouchers are not consecutively arranged then lots of time will be lost to find out a specific voucher.

2.A auditor must pay attention to the dates,amount,name of the party who is using the voucher and to whom the voucher is issued which must be similar with the cash book.

3.auditor should put special attention to those voucher which are in the name of secretary,directors,partner,manager.

4.auditor should also check that every voucher is properly issued by responsible officer.

5.he should also check the nature of the payment whether it related to business or not.

6.he should also check where the payment is posted, in revenue or in capital.

7.he should also pay attention to both amount and word figure.

8.he also have to make note if further evidence is required for any voucher.

9.If duplicate voucher for missing voucher is produced then it should be scrutinized more carefully.

10.he should also checked every voucher whether it is stamped or not if it is over a certain amount.

11.an auditor can not take any help from the staff or client while auditing vouchers.

12.he should also check that whether Receipted invoice is consider as voucher or not.if not then it must be consider as voucher there is a danger of payment being made twice.

13.while check the voucher for insurance,rents,taxes ,etc the auditor should notice the period because sometimes these payment are made in advance,so he should check weather proper adjustment is made or not.