Auditing Testing - Cash sales

Special procedures- cash sales

There are some types of business where a significant
proportion of trading activity is carried out in cash.

Examples of such types of business are:

·
Shops and supermarkets

·
Bars, cafes and restaurant

·
Taxi firms

Auditors therefore have not only to be aware of the
correct procedures for verifying that sales income has been recorded correctly
but of the increased likelihood of fraud

Audit procedures will also include

·
Review of procedures for recording cash sales –
eg tills, cash sheets etc

·
Review and sample testing of banking procedures

·
Unsure cash sales banked intact, i.e money is
not taken from cash sales to pay small bills or top up pretty cash floats

·
Ensure reconciliation and banking of cash
retained on client’s premises by checking paying in slip dates

·
Check entries in cash book with banking and till
receipts or cash sheets.

It is often very difficult to obtain conclusive proof
that all cash sales have been recorded and auditors should be alert to
opportunities for recommending improvements to the clients systems wherever
possible