Question

Audit Objectives" Please respond to the following: Evaluate the inherit risk of employee access to funds and other assets, indicating how internal controls can minimize the risk. Explain your rationale. Imagine you are the audit partner in charge of the field audit. Make recommendations for verifying that all checks sent by the customers have been appropriately deposited and recorded in the general ledger.

Answer 1

1. Inherent risk of employees having access to the funds and other assets:

• Restricting the access to only those employees who are authorized to have access.
• The respective person having the access shall have proper Competence to handle the funds and other funds.
• The respective person should report on a timely basis to the respective heads on all the funds collected and utilized.

2. Ensuring that all the checks have been properly deposited and recorded in the general ledger:

• Verify the bank statement and compare it with the general ledger to ensure that all the cheques that have been received and recorded in the General ledger have been deposited properly.
• Check whether the cheques outstanding during the year end have been subsequently cleared within the due date.