The auditors may test one or more replenishment transactions by examining petty cash vouchers

and verifying their numerical sequence. Petty cash funds are sometimes kept in the form of
separate bank accounts. The bank should be instructed in writing not to accept for deposit is such
an account any checks payable to the company. The deposit will be limited to checks to
replenish the fund and drown payable to the company. The deposits will be limited ot checks to
replenish the fund and drawn payable to the bank or to the custodian of the fund. The prohibition
against deposit of checks payable to the company is designed to prevent the routing of cash
receipts into petty cash since this would violate the basic assumption of limited disbursements
and review at time of replenishing the fund. (O. Ray Whittington and Kurt Pany; 2001, p. 392)

2.6. Internal Control Over Cash on Deposit

The verification of cash on deposit starts at the verification day of cash on hand. For verifying
cash on deposit cut off data is needed which records all cash receipts and disbursements
preceding the verification date. The bank reconciliation will be greed with the totals of the cash
receipts total in the working paper, which have the dated, number and amount of the last
checques written.

The controller must verify all the reconciling items that is the balance in the general ledger and
on the bank statement. The most common reconciling items are: deposit in transit, outstanding
cheques and other reconciling items. (John W. Cook 1980)