Audit Program for Cash

Jan. 12, 2019

Company: XYZ Company

Section: Audit and verification
Year: 2018

Done by Date W/P Ref.

Assertion 1: Existence or Occurrence
Audit objectives
A. To determine whether cash exists at year-end
and cash-related transactions
B. To determine that all cash balances of the
client are reflected on the balance sheet at
year-end
Audit procedures
1. Obtain analysis of cash balances as of the Biticon, J. 1/2/19 A-2B
balance sheet date.
2. Confirm bank balances as of the balance Hall, J. 1/2/19 A-2B
sheet date.
3. Perform cash count procedures for cash on Romney, M. 1/3/19 A-2B
hand
4. Obtain (prepare) bank reconciliations as of Valix, C. 1/4/19 A-2B
the balance sheet date.
5. Trace all transfers occurring between banks James, L. 1/5/19 A-2B
near year-end.
Assertion 2: Completeness
Audit objective
C. To determine whether all cash transactions
are recorded in the proper accounting period
Audit procedures
6. Obtain a cutoff bank statement containing Hall, B. 1/5/19 A-3C
transactions several days subsequent to the
balance sheet. Examine items returned with
the cutoff bank statements.
7. Prepare proof of cash transactions occurring Santiago, D. 1/6/19 A-3D
during a specified period as they are recorded
by the bank and the client.
8. Verify the client’s cutoff of cash receipts and Factor, T. 1/7/19 A-2D
 cash disbursements.
Assertion 3: Rights and Obligations
Audit objective
D. To determine that cash balances are available
for use without restrictions, properly indicated
in the balance sheet.
Audit procedures
9. Review bank statements and the bank replies Santiago, D. 1/8/19 A-3A
to confirmation letters.
Assertion 4: Valuation or Allocation
Audit objective
E. To determine if cash is recorded and
presented at the proper amount.
Audit procedures
10. Verify existence of cash in banks under
receivership, cash subject to court’s Arthur, J. 1/8/19 A-2D
restraining order, in foreign banks and in
foreign currency.
Assertion 5: Presentation and disclosure
Audit objective
F. To determine whether cash is presented in
accordance with generally accepted
accounting principles.
Audit procedures
11. Investigate any checks representing large or Cardi, B. 1/8/19 A-2G
unusual payments to related parties.
12. Evaluate proper financial statement Eminem, D. 1/10/19 A-4A
presentation and disclosure of cash.
 XYZ Company
Cash Account Balances
As of December 31, 2018

W/P reference A-2

Cash in Bank X – savings account no. 256 SF P 500,000 A-4B
Cash in Bank X – current account no. 374 C 1,000,000 A-4A
Cash in Bank X – payroll account no. 324 C 1,500,000 A-4C
Cash in Bank Y – savings account no. 245 C 2,000,000 A-5A
Cash in Bank Z – current account no. 434 ✓ 500,000 A-5C
Cash on Hand TB 500,000 A-6A
Petty cash fund X 50,000 A-6B
Total To A-Lead

Purpose:
This working paper was prepared to list the cash balances at year-end.

Conclusion:
The amounts reported above agree materially to reports filed. One exception was noted and
detailed below.

Tick marks legend:

C Confirmed
TB Agrees with trial balance
SF Amount included P100,000 sinking fund, related to a bond payable with maturity dated on
December 31, 2020. Reclassified to noncurrent financial assets.
✓ Amount agree with reports filed
X As of year-end, the petty cash fund is unreplenished. The composition is bills and coins
20,000, and voucher expenses totally 30,000. There is no cash shortage. Adjusted to
actual amount, 30,000.
 A-LEAD
XYZ Company Prepared by:

Cash Lead Schedule

For the year ended December 31, 2018 Christian Dominic Amoncio
Reviewed by:

Alvielle Izza Catcha

Account title Audited Unaudited AJE Adjustments Audited WP Ref

balance, balance, balance,
12/31/17 12/31/18 Debit Credit 12/31/18
Bank X 200,000 TB 500,000 1 100,000 400,000 A-4A
Savings
Bank X Current 900,000 TB 1,000,000 1,000,00 A-4A
0
Bank X Payroll 1,000,000 TB 1,500,000 1,500,00 A-4A
0
Bank Y 2,000,000 TB 2,000,000 2,000,00 A-4A
Savings 0
Bank Z Current 300,000 TB 500,000 500,000 A-4A
Cash on hand 200,000 TB 500,000 500,000 A-4A
Petty cash fund 40,000 TB 50,000 2 20,000 30,000 A-4A

5,000,000 GL 6,050,000 5,930,00 A-5

0
 XYZ Company
Bank Transfer Schedule
For the month of December 2018

Transfer in Transfer in Date Transfer Out Transfer Out Date

Amount Amount
Bank X- 256 100,000 12/1/18
Bank Y- 245 100,000 12/2/18
Bank Z- 434 200,000 12/5/18
Bank X-256 200,000 12/5/18
Bank X- 256 50,000 12/20/18
Bank Z-434 50,000 12/20/18
Bank Y-245 450,000 12/22/18
Bank X-324 450,000 12/23/18
 XYZ Company
Client’s Cutoff of Cash Receipts and Cash Disbursements
For the month December 2018

Last check prepared dated December 30, 2018 Check No. 4567
First check prepared dated January 2, 2019 Check No. 4568

Last official receipt used dated December 30, 2018 OR No. 8901
First official receipt used dated January 3, 2019 OR No. 8902

Last cash sales invoice used dated December 31, 2018 Sales invoice No. 4321
First cash sales invoice used dated January 1, 2018 Sales invoice No. 4322
 XYZ Company C-LEAD

Summary of Receivable Confirmation Prepared by:

For the year ended December 31, 2018
Custome Balance Comments from customers Christian Dominic Amoncio
Audit findings
Reviewed by:
r
ABC P 30,000 Our deposit of P60,000 should XYZ credited the advance
have covered this balance. Alvielle
payment Izza
toCatcha
sales revenue.
DEF 50,000 We are rejecting the price per XYZ’s clerk erroneously computed
invoice, which is too much. the unit price at P500. The unit
price should be P300.
GHI 300,000 Since this is goods on Goods cost P250,000 and were
consignment from XYZ, we will excluded in the inventory.
remit payment upon selling the
goods and return the goods if not
sold until January 31, 2019.
JKL 65,000 We never received these goods. The shipment was erroneously
made to another customer, and the
goods costing P55,000 are not on
its way to JKL. The shipment was
made FOB shipping point.
MNO 100,000 This balance was paid on XYZ received the customer’s
December 31, 2018. check on January 2, 2019.
PQR 150,000 Balance was offset by our June 10 XYZ credited accounts payable for
shipment to XYZ Company. We 150,000 to record purchase from
agreed to offset. supplier PQR.
STU 50,000 We have not yet received the The shipment was made FOB
goods. shipping point on December 30,
2018 and so on its way to STU.
VWA 8,000 The invoice we received indicated XYZ’s clerk erroneously typed the
an amount of 8,000 only. invoice document. The amount
should have been P80,000.
GTI 70,000 Credit memo no. 24123 cancels The credit memo dated December
this balance. 30, 2018 was recorded by XYZ on
January 3, 2018.
NCR 90,000 This balance was paid on XYZ received the customer’s
December 29, 2018. check on December 29, 2018,
deposited it immediately and was
returned by the bank marked NSF.
XYZ Company

Receivables from Customers Lead Schedule

December 31, 2018

Account name WP Amounts at Amounts at

Ref. 12/31/2018 12/31/2017
ABC Company C-1 8,125,000 7,521,000
DEF Company C-2 1,500,000 250,000
GHI Company C-3 10,800,000 8,750,000
JKL Company C-4 12,250,000 15,510,000
Total 32,675,000 32,031,000
Less:
Allowance for doubtful accounts ✓ (1,200,000) (500,000)
Allowance for sales return ✓ (50,000) (80,000)
Allowance for freight charge ✓ - (10,000)
Net accounts receivable from customers 31,425,000 31,441,000

Purpose: This working paper was prepared to detail the amounts reported in the annual statements,
specifically the accounts receivable portion of the Trade and Other Receivables.

Conclusion: The amounts listed agree to the financial statements.

Tickmark Legend
✓ Amounts agree to the financial statements.
January 5, 2019

DEF Company
Red Avenue, Pula
Davao City
Philippines

This request is being sent to you to enable our external auditors to confirm the correctness of our
records. It is not a request for payment. Thus, do not send payment to us, nor to our auditors.
Our records on December 31, 2018 showed an amount of P1,500,000 accounts receivable from
you. If it does not agree with your records, please report any exceptions directly to our auditors from SGV
& Co. An addressed enveloped is enclosed for this purpose.

Very yours truly,

C/o SGV&Co.

SGV & Co.

Damosa Avenue
Davao City
Philippines

The above amount is incorrect for the following reasons:

Yours faithfully,

XYZ Company
 XYZ Company
Aging of Accounts Receivable Schedule
December 31, 2018

Age Per client Adjustment Per audit % uncollectible Required

allowance
Current 1,200,000 (200,000) 1,000,000 1% 10,000
31 to 60 days 1,500,000 250,000 1,750,000 5% 87,500
61 to 90 days 2,000,000 2,000,000 10% 200,000
91 to 120 days 1,700,000 300,000 2,000,000 20% 400,000
Over 120 days 1,300,000 1,300,000 30% 390,000
Total 7,700,000 350,000 8,050,000 1,087,500

Required allowance 1,087,500

Less: Allowance for doubtful accounts, credit balance 650,000
Doubtful accounts expense 437,500