Cash Outflow Proceduires

Apollo Shoes has recognized that there is a risk of loss due to irregularities in cash outflows, accounts payable, and payroll. Substantive procedures for cash outflows, accounts payable, and payroll are needed to detect irregularities in each of these. Failure to implement appropriate procedures will lead to loss irregularities. Substantive Procedures to Evaluate Cash Irregularities

Substantive procedures for detecting irregularities in the cash cycle follow normal audit procedures of testing internal controls over cash and by collecting and evaluating audit evidence are needed. Following instruction set forth by Joe Bootwell, Chief Financial Officer (CFO), Karina Ramirez, Director of Internal Audit, established the following procedures for testing cash irregularities (University of Phoenix, 2013). 1. Cash receipt procedures.

Confirm that persons receiving cash are authorized.

Evaluate mailroom cash receipt procedures.

Confirm that surveillance cameras are recording properly.

Confirm pre-numbered receipts are issued.

Evaluate procedures for out of sequence receipts.

Confirm cash deposits are made by a person other than those approved to receive cash. Confirm deposit reconciliations are made by a person other than the persons receiving and depositing cash. 2. Cash receipts are deposited daily and are in complete (Louwers, et al, 2011). Compare cash receipts to cash receipt journal.

Compare deposits slips to amount received.

Recalculate cash receipts with amount deposited.

Compare amount deposited to bank statement deposits.

Compare receipt date to recording date.

Compare recording date to deposit date.

Trace receipt to posting in account

3. Confirm deposits are reconciled with accounts receivable. Trace cash deposits to cash journal.

Compare deposit slips to cash journal.

Observe process of reconciling deposit to bank account.

Send account verification to Twenty First National Bank to confirm cash balances. 4. Checks (Wells, 2011).

Confirm...