Bank confirmation letter
external and valuable source of audit evidence that comes directly from an independent source
Control over the content and dispatch of confirmation requests is the responsibility of who ?
the auditor
What are the approaches in seeking confirmation of balances/information from the bank ?
- Listing balances and other information and requesting confirmation of their accuracy and completeness
- Requesting details of balances and other information which can be compared with the client’s records
Auditor should request information about nil balances on accounts and accounts which were closed in the 12 months prior to the chosen confirmation date
Yes
Procedures for performing cash count
📝 1. Obtain the Client’s Cash Count Instructions
Check that the company has proper cash count procedures in place (e.g. who is responsible, timing, security).
🧮 2. Count the Cash in Presence of Custodian
Physically count all cash on hand (notes and coins).
Do this in the presence of the person responsible for the cash (e.g. cashier or accountant).
- Do Not Let the Client Know in Advance
Ideally, attend a surprise cash count to prevent manipulation.
This reduces the risk of fraud or temporary borrowing of cash.
📄 4. Compare to Cash Book / Count Sheet
Compare the actual cash counted to:
The cash book balance, and
The cash count sheet prepared by the client. - Investigate Differences
If there’s a shortage or surplus, ask management for an explanation.
Ensure any differences are recorded and followed up.
🔐 6. Check Security of Cash
Inspect the safe, lockbox or cash drawer.
Ensure it is secure and access is limited to authorised personnel.
📦 7. Check for Unusual Items
Make sure no:
IOUs
📅 9. Perform Cut-Off Tests
Review cash receipts and payments just before and after year-end.
Ensure they’re recorded in the correct accounting period.
📦 10. Cash Floats / Petty Cash
Verify the petty cash float amount is intact.
Check petty cash vouchers for proper authorisation and support.
Personal cheques
Post-dated cheques
Unrecorded cash
📸 8. Document Everything
Record:
Date, time, location of count
Who was present
Amount counted
Q
