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1.) For payments received by received by mail, is a mail log maintained by
hand in ink to prevent alteration that lists the date of receipt, amount
of check, etc.?
2.) Is the mail log prepared by someone independent of the cash receipts

3.) Are checks stamped with a restrictive endorsement immediately upon

receipt - by the cashier before putting the check in the cash drawer or
by the person opening the mail?
4.) Is cash counted and verified when cashiers receive their drawers?
5.) Is only one cashier able to access each cash drawer at any given time so
that cash will at all times be in the possession and control of only one
6.) Are cash drawers assigned to one person and not shared across shifts /
7.) Is a receipt given for all transactions that are conducted in person -
whether by cash register or pre-numbered receipt?
8.) Are duplicate copies of receipts retained?
9.) Are manual receipts issued from a bound book that has prenumbered
10.) Are receipts issued in sequence?
11.) Are receipt books regularly reviewed for missing receipt numbers by
someone other than a cashier?
12.) Are voided pre-numbered documents kept in the bound receipt book?
13.) If applicable, are cash register summary reports reconciled to the cash
count at the close of a shift?
14.) Are the following cash register controls used:
a.) Locked-in-totals?
b.) Voided copies of receipts retained for audit purposes?
c.) Do cash register procedures reflect proper daily checkout and
d.) Are locked-in audit copies of receipts used where appropriate?
e.) Are cashiers provided separate cash drawers to establish
f.) Are cash drawers locked during a cashier’s absence?
1.) Are all funds received deposited with no funds being held back for
change, petty cash, etc.?
2.) Are deposit slips prepared in at least duplicate form?
3.) Do you use a either a locking bank bag or a sealing plastic tamper proof
bag for deposit?
4.) Do two people accompany the departmental deposit from the office to
the nearest depository?
1.) Are policies and procedures relevant to petty cash current and in
2.) Are these policies and procedures clearly stated and systematically
3.) Do these policies and procedures support internal control?
4.) Have the department’s petty cash funds been authorized by the Petty
Cash Custodian?
5.) Are petty cash funds used only for appropriate purposes that are
supported by receipts signed by the person making the expenditure?
6.) Is the fund periodically counted by someone other than the custodian
and who is not under the control of the custodian?
1.) Are credit and collection and write off policies and procedures current
and in writing?
2.) Are these policies and procedures clearly stated and systematically
3.) Do these policies and procedures support internal control?
4.) *Are the responsibilities for maintaining detailed accounts receivable
records segregated from collections, disbursement, and general ledger
posting functions?
5.) *Do controls in the system exist that provide assurances that individual
receivable records are posted only from authorized source
6.) *Are controls maintained that provide assurances that customer
database and, where appropriate, usage records are accurately
maintained to ensure that amounts due are billed?
7.) Are billings controlled and properly accounted for?
8.) *Is there adequate control over the mailing of statements to prevent
interception prior to mailing?
9.) Are statements of account balance mailed on a timely basis, where
10.) *Are aggregate collections on accounts receivable reconciled against
postings to individual receivable accounts?
11.) *Are all valid receivables promptly recorded?
12.) Are letters of credit reviewed for accuracy?
13.) Are aged accounts receivable balances periodically reviewed by
supervisory personnel?
14.) *Do adequate procedures exist for follow-up and collection of
delinquent accounts?
15.) Are there controls to insure that individuals with delinquent accounts
are precluded from receiving additional credit?
16.) Are delinquent accounts reviewed and considered for charge-off on a
timely basis?
17.) *Are write-offs or other reductions of receivables, including noncash
credits, credit memos, and allowances, formally approved by senior
officials not involved in the collection and recording function?
18.) Do procedures exist that ensure that interest and penalties are
properly charged on delinquent accounts?
19.) Are credit balances periodically reviewed?
20.) Does internal control appear adequate for the accounts receivable
system overall?
Other remarks concerning the evaluation of internal control for the receivable cycle:

1.) Are policies and procedures current, in writing, and properly
2.) Are these policies and procedures clearly stated and systematically
3.) Do these policies and procedures support internal control?
4.) *Are receiving, issuing, accounting and storing responsibilities properly
5.) *Has management taken the appropriate steps to safeguard goods
against risk of loss by theft (e.g., goods kept in locked buildings, rooms,
or drawers, access to which is granted only to authorize personnel)?
6.) Are inventory records reconciled (and differences explained) to
Advantage reports on a regular basis? (Current inventory is adjusted at
year-end by fiscal year-end physical counts.)
7.) *Do departments compare quantities received against receiving
reports, etc.?
8.) *Is material released from storerooms only on the basis of requisitions
which are approved by a responsible official of the department?
9.) *Is adequate provision made for obsolete and inactive items in
10.) *Does management monitor and approve the write-offs of obsolete
and inactive inventories?
11.) Where details are kept as to value, are they reconciled to general
ledger controls at reasonable intervals (at least annually)?
12.) *Are all classes of inventory items physically counted annually
(triennially if there are perpetual records)?
13.) *Do procedures for physical counts provide for:
a.) Adequate written instructions?
b.) Adequate supervision?
c.) Clearly marking damaged and obsolete inventory?
d.) Use of pre-numbered tags which are accounted for?
e.) The counting of the items and access to the tags only by
employees who are not responsible for custody of the particular
f.) The rechecking of counts and descriptions (dual counts) where
perpetual records are not maintained and where variations from
the perpetual records are significant?
g.) Careful investigation of significant overages and shortages?
h.) Prompt adjustment of records for inventory discrepancies after
approval by a responsible official other than stores personnel?
i.) Recording counts on permanent inventory count sheets?
j.) The signing and dating of inventory count sheets by the person
supervising the count?
k.) *Does management review the reconciliation of physical inventory
counts to the inventory records?
14.) Are adequate provisions made for cut-off of receipts and issues?
15.) If applicable, are issuing and billing procedures designed and
correlated so as to ensure the billing of all items?
16.) Is there physical segregation and proper accounting control of
merchandise on hand that is not property of the entity?
17.) Is adequate insurance coverage provided?
Questions 18, 19, 20, 21, 22, and 23 apply only to Perpetual Inventory
18.) Are detailed perpetual inventory records periodically reviewed for
slow-moving items?
19.) Is a perpetual inventory system (including quantities and value) in use
as to all major classes of inventory?
20.) Are perpetual inventory records updated promptly?
21.) Are the postings to the perpetual inventory records made promptly
a.) Pre-numbered, signed receiving reports?
b.) Issue requisitions?
22.) Are additions to perpetual inventory records referenced to supporting
invoices to insure easy verification of the records?
23.) Are inventories taken without prior reference to quantities on
perpetual records?
24.) *Are discrepancies between physical counts and perpetual records
investigated and resolved?
25.) Does internal control appear adequate for the inventory system
Other remarks concerning the evaluation of internal control for inventories:


1.) Are purchases of PPE initiated by the purchasing agent?
2.) Are all purchases of PPE approved by the Board of Directors?
3.) Does the company have a policy for distinguishing between those
items that are to be capitalized and those that are to be expensed as
repairs and maintenance?
4.) Does the company maintain a fixed asset subsidiary ledger?
5.) Are periodic comparisons made between the fixed asset, subsidiary
ledger and the actual assets?
1.) *Are all invoices received directly by the person who processes invoices
for payment?
2.) *Are payments made only on the basis of original invoices and are
duplicate copies of invoices clearly marked immediately upon receipt to
prevent duplicate payment?
3.) *Does the review of invoices include:
a.) Check of terms, prices, and quantities on invoices against purchase
b.) Check of items and quantities with those indicated on receiving
reports obtained directly from the receiving department?
c.) Mathematical check of footings, extensions, and discounts?
d.) A final approval for payment?
e.) Indicating on the invoice that the above checks and approvals were
4.) *Do controls exist ensuring accurate account distribution of all entries
resulting from invoice processing?
5.) *Do controls exist for processing invoices that do not involve materials
or supplies (e.g., fees, rentals, power and light, taxes, travel, etc.)?
6.) Are written contracts used for all professional and artistic services?
7.) Do procedures exist to review billings for contractors for compliance
with the contract prior to making payments?
8.) *Are returned purchases controlled in a manner that ensures that the
refund or credit will be received?
9.) *Are vendor credit memos resolved promptly by cash refund or taken
against subsequent purchases?
10.) *Are adequate records maintained of unmatched purchase orders and
receiving reports and unvouchered vendors’ invoices and are these
periodically reviewed and investigated?
11.) *With respect to partial shipment from vendors:
a.) Is a control maintained clearly indicating on the P.O. information as
to the payment to avoid duplicate payment upon completion of the
b.) Are there any other procedures in effect to prevent duplicate
payments on partial shipments by vendors?
12.) *Is an accounts payable trial balance taken and balanced to the general
ledger control at least monthly?
13.) Are monthly statements from vendors regularly reconciled to open
vouchers or accounts payable ledgers?
14.) *For accounts payable balances:
a.) Are adjustments of recorded amounts required to be supported by
proper approval?
b.) Are debit balances properly reviewed and followed up?
15.) Are expenditures of funds in excess of budgeted amounts approved by
the budgeting office?
16.) *Are the duties of data authorization, data entry, data verification, data
correction, and receipt and distribution of warrants/checks adequately
17.) *Are checks/warrants verified to the check/warrant register and
supporting documentation prior to disbursement by someone
independent of preparation?
18.) Does internal control appear adequate for the accounts payable system
Other remarks concerning the evaluation of the internal control for the Accounts Payable:

1.) Is the entity’s purchasing policy in writing and properly approved by the
2.) When preparing a Purchase Order, do procedures exist to ensure that
the best quality, total price, and delivery is obtained?
3.) Are all purchases made from contracted vendors?
4.) *Are price lists and other appropriate records of price quotations
maintained by the purchasing department?
5.) *Is the purchasing function separate from the accounting and receiving
6.) *Are purchase orders:
a.) Pre-numbered and controlled?
b.) Prepared only on the basis of purchase requisitions approved by
authorized persons?
c.) Approved by an authorized individual?
7.) Is an adequate record of open purchase orders and agreements
8.) *Does management monitor information such as unusual or significant
transactions, disputes with vendors, control overrides, long outstanding
items, etc.?
9.) *Does management review reports on expenditure activity?
1.) *Are the receiving clerks independent of the purchasing department
and person initiating purchases?
2.) *Are written receiving reports:
a.) Numerically accounted for or otherwise controlled to ensure that
all receipts are reported to the accounting department?
b.) Prepared for all purchased goods?
c.) Signed and dated?
3.) *Is a copy of the receiving report or other permanent record of material
received kept in the receiving department?
4.) *Are merchandise, materials and supplies inspected for condition and
counted, weighed or measured in the receiving department?
5.) *If copies of purchase orders are furnished to the receiving department,
are quantities omitted in order to ensure an actual count of the
quantities received?
6.) *Are descriptions of supplies, materials, and equipment checked by the
receiving department against a copy of the purchase order or some
other form of notification?
7.) Are procedures in effect that require the person receiving goods of
services to document the receipt by signing the invoice or receiving
8.) *Does management periodically review receiving and purchasing
reports to determine that counts are performed and differences are
9.) Are copies of receiving reports sent directly to purchasing, accounting,
and, if appropriate, inventory recordkeeping?
1.) Are all cash disbursements other than petty cash items made by
check/warrant from authorized bank accounts?
2.) Are serially pre-numbered check/warrants used?
3.) *Is the supply of unused checks/warrants adequately safeguarded and
under the custody of persons who do not sign checks/warrants
4.) *Are checks/warrants prepared only on the strength of properly
approved vouchers (or check requests) by persons who do not approve
the vouchers (or check requests)?
5.) *Are spoiled checks/warrants properly voided to prevent reuse and kept
on file for subsequent inspection?
6.) Is a copy of the check/warrant or a check/warrant register prepared
simultaneously with the preparation of the check?
7.) *Are the supporting data and approvals on the vouchers reviewed by
the check/warrant signers at the time of signature?
8.) *Is notation of payment made on supporting data to prevent duplicate
9.) *Are checks/warrants mailed by a person independent of the person
who requested, prepared or recorded them?
10.) *Are there limitations on the amounts of single signature
11.) *Is the person writing checks/warrants prohibited from drawing checks
payable to:
a.) Officers or employees (other than for travel, petty cash
reimbursements, etc.) with the understanding that the cash is to be
used for company purposes?
b.) Cash, bearer or similar payee that renders the check payable to
12.) Does management review cash disbursement reports and investigate
unusual or significantly large expenditures?
13.) Are checks/warrants outstanding for a considerable time periodically
reviewed for propriety?

* Question was designed to help identify risk factors that could result in errors, fraud, irregularities and/or
illegal acts. When the question is answered “NO”, the risk factor identified should be considered when
analyzing the department’s operations, and the completed questionnaire should be forwarded to
Financial Controls.