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"Audit Objectives" Please respond to the following: Evaluate the inherit risk of employee access to funds...

"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.

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Answer #1

Evaluation of internal controls is an essential part of an audit.

A good internal control is essential in case of receipts in an organization.

Ensure that the cheques received in an organization are deposited in the bank the very next day and in case of any non possibility in the following day.

Ensure that the person who are entering the journal entries in the books is different from persons who are handling the cheques.

Always cross cheque the cheques given in the bank with the books and consider the BRS statements.

Always analyse the cheques which are not realised and analyse the reasons thereof.

Ensure that the reversal entries and rectification entries are passed for the cheques not realised.

Possibly rotate the roles of the employees and encourage the employees to go on leave and cross check the accounts in his absense.

Always a 2layer or 3layer hierarchy verification is a must to avoid falsification.

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