Question

Explain the Audit procedure in an organisation where most of the sales is in cash.

Answer 1

Explanation:

Substantive Procedures for Cash

Confirm cash balances.

Vouch reconciling items to the subsequent month's bank statement.

Ask if all bank accounts are included on the general ledger.

Inspect final deposits and disbursements for

Answer 2

Audit methods assess the quality of financial information given by business, leading to expression of an auditor's opinion.

• In a business, sales and collections cycle refers to the set of operations that begin when a client buy products or services and finish when the business receives complete payment.
• The various steps in the audit procedure include -

1. Testing the controls business has set up for sales cycle to determine how strong and reliable they are.
2. By checking individual transactions, an auditor evaluates if the financial statement quantities of sales and accounts receivable are valid.
3. An external financial statement audit's goal is to offer assurance on the figures. Many sales cycle audit techniques, lead to fraud identification.
4. Maintaining financial security through Internal auditing. Checking inconsistencies in the quantity of items taken from stock, cash totals, check totals, and deposit totals as part of the cash audit.