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Construction Industry Intrnal Audit

Construction Industry Intrnal Audit

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Published by: Alexandros Mavratsas on Sep 02, 2011
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09/01/2013

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6.15 Cash and Bank plays a vital role for any business
entrepreneur. The management of this liquid asset speaks
about the ethics of an entity. With all kinds of vigilant measures
implemented to safeguard these current assets, yet loop holes,
will be there. Bank transactions can be more regularized than
cash transactions, as the risks involved in cash is comparatively
high. As such in case of construction entities cash transactions
are relatively huge ranging from petty to large. The different
types of transactions that get covered here include:

Receipts of contract and consultancy fees

Payment to vendors and sub-contractors

Fund transfers

Payment of petty expenses, cash withdrawals and
imprest payments

Cash and bank book maintenance

Recording and reporting of all cash and bank
transactions

Recording and reporting of bank guarantees and letter of
credits.

In some cases, there might be a requirement to carry enormous
sums of money in cash for payment of wages to the workers,
meeting expense for purchase of materials, and alike.

Technical Guide on Internal Audit of Construction Industry

68

Illustration of how the procedure is normally followed in relation
with a construction entity is mentioned here under. In the
course of formulating the procedures other areas to be covered
are:

Persons Involved for every procedure

Key roles and responsibilities of such persons

Delegation of authority.

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