AUDIT PROGRAM

C /AP
CLIENT: ______________________________________________

PERIOD: ______________________________________________

SUBJECT: BANK BALANCES AND CASH

Est. Phase/ W/P

Procedures By Comments/Explanations
Hrs. Level Ref.
AUDIT OBJECTIVES

To determine whether:

A. The cash and bank balances represent all cash that are
owned and on hand, in transit to or from financial
institutions, or in financial institutions or held in
custody by others for the account of the entity, and are
properly recorded.
B. The cash and bank balances are properly described
and classified, and adequate disclosures (including
amounts restricted, committed or pledged) with
respect to these amounts have been made.

SUBSTANTIVE PROCEDURES

1. Overall Analytical Review

1.1 Compare the balance of each significant cash and cash

equivalent account with the comparable balance for
the preceding period. Investigate significant or
unusual fluctuations.
1.2 Trace the opening balances from last year’s working
paper file and initial them.
1.3 Compare the ratio of available cash to cash invested
with the comparable ratio for the preceding period.
Investigate significant or unusual fluctuations.
1.4 Relate changes in working capital and in debt
balances to changes in cash balances and compare
cash balances to seasonal fluctuations in the entity’s
business.

2. Circularization

2.1 Have the client prepare "Standard Bank

Confirmation" forms (Scope/Sample: __________)
and confirmations of investments. (Scope/Sample:
__________.)
2.2 Control mailing of first request. Retain copies.
2.3 Follow-up on confirmation requests and send second
and third requests as necessary. (First reminder to be
sent after 15 days and second reminder after 07 days
of the first reminder with a copy to the President of
the bank).
 AUDIT PROGRAM
C /AP
CLIENT: ______________________________________________

PERIOD: ______________________________________________

SUBJECT: BANK BALANCES AND CASH

Est. Phase/ W/P

Procedures By Comments/Explanations
Hrs. Level Ref.
2.4 Obtain representation from client for opening and
closing of bank accounts and confirm it, from the
bank and cross refer it with the general representation
letter list of bank accounts provided.
2.5 Obtain confirmations/certifications duly addressed to
us and preferably directly provided to us with regard
to cash balances held by employees etc., on behalf of
the Company not physically counted by us.

3. Bank Balances

3.1 Prepare summary of all bank balances and deposits on

standard schedule.
3.2 Obtain a copy of bank reconciliations/prepare using
short form/long form bank reconciliation format
(Scope/Sample: __________ ) and check clerical
accuracy.
3.3 Trace balances on the reconciliations to the bank
confirmations and to the lead schedule or trial
balance.
3.4 Obtain a list of outstanding cheques (Scope/Sample:
__________). Foot each list and compare the total to
the bank reconciliation. Test completeness of list
through upstream and downstream comparison of
__________ checks with the post-year end bank
statement. Review list and bank statement for large or
unusual items and follow-up as deemed necessary.
3.5 Review the reconciliations and investigate any large
or unusual items. Test reconciling items greater than
Rs. __________.
3.6 Investigate other reconciling items (e.g., bank errors,
deposit corrections, bank charges, returned cheques,
etc.) for each account included in the summary,
maturity of those outstanding for long periods.
3.7 Verify significant items by reference to the cutoff or
subsequent bank statements and supporting critical
forms and documents ( ). Scope/Sample: (
)
3.8 Obtain an explanation for other reconciling items that
have not cleared the bank in the subsequent period.
3.9 If the reconciliation is performed as of the balance
sheet date, propose adjustments for reconciling items
that cleared the bank before the reconciliation date but
are recorded on the books at a subsequent date (bank
charges etc).
4. Foreign Currency Balances
 AUDIT PROGRAM
C /AP
CLIENT: ______________________________________________

PERIOD: ______________________________________________

SUBJECT: BANK BALANCES AND CASH

Est. Phase/ W/P

Procedures By Comments/Explanations
Hrs. Level Ref.
4.1 Ensure cash and bank balances in foreign currencies
are re-translated at the balance sheet date at the
exchange rate at that date.
4.2 Ensure that hedge accounting practices in accordance
with IAS-39 have been followed with regard to any
balances covered under forward exchange contracts.
4.3 Obtain a schedule of re-translation, from rate at initial
recognition and at balance sheet date, of all balances.
Cross-refer exchange differences with financial
charges/other income.
4.4 Where the company uses forward exchange contracts,
such contracts should be accounted for as assets and
liabilities. Gains and losses on such financial
instruments used for hedging of foreign currency
transactions should be recognized as income and
expense on the same basis as the corresponding
hedged item. Foreign exchange contracts are
translated at exchange rates prevailing at the balance
sheet date (representing their fair value).

5. Restrictions

5.1 Inquire as to restrictions on any cash accounts;

compare inquiry results to cash, debt and legal
confirmation replies. Ensure disclosure of restrictions.

6. Cash Payments

6.1 Obtain management’s authorization regarding

maximum limit of payment through Petty Cash
Voucher.
6.2 Review (Scope/Sample:_________) Petty Cash
Vouchers to check whether all petty cash payments
are within limits prescribed by the management.
6.3 Obtain management’s authorization regarding
maximum limit of each individual to sign check.
6.4 Review (Scope/Sample:__________) cheque counter
foil to ensure that the cheques are signed by
individuals authorized by the management in this
behalf and their initials are present on cheque counter
foils.

7. Scanning of Cash Book and Bank Statement

7.1 Scan cash book (Scope/Sample:________) to identify

unusual entries.
 AUDIT PROGRAM
C /AP
CLIENT: ______________________________________________

PERIOD: ______________________________________________

SUBJECT: BANK BALANCES AND CASH

Est. Phase/ W/P

Procedures By Comments/Explanations
Hrs. Level Ref.
7.2 Scan bank statement (Scope/Sample:______) to
identify unusual entries.
7.3 Have the client prepare a list of interbank and
intrabank transfers for ( ) days before and after
the reconciliation date. Scope/Sample:( ).
7.4 Determine whether any interbank or intrabank
transfers noted in testing bank reconciliations and
reviewing the cash records have been included in the
listing.
7.5 Compare listed amounts with the appropriate bank
reconciliations and determine whether transfers as of
the reconciliation date were properly accounted for as
outstanding cheques and deposits in transit.
Scope/Sample:( ).
7.6 Consider matching cash book and bank statement for
a month for selected accounts, if the risk status of
client is “High”.
7.7 Scan bank statements to identify any payments made
through “Cash” or “Bearer Cheques”. Investigate each
significant item and check postings in cash book. If
such instances are frequent cover in ML/Covering
letter to the board /Report, as appropriate.

8. Physical observation of cash

8.1 Determine if any yearend observations/ counts of

cash, cheques held is required. Observe cash count
and use cash and security count checklists. Note last
documents.
8.2 Check whether cash in hand is adequately insured.
8.3 Obtain approval of amount of imprest signed by a
responsible official.
8.4 Obtain approval of any increase / decrease in amount
of imprest alongwith reasons thereof.
8.5 Obtain certificate of cash in hand of places where cash
count was not performed by audit staff and give
reason of not carrying out cash count. Conclude
whether such classification may be accepted on the
basis of materiality and risk involved.
8.6 Obtain reconciliation of difference, if any, of physical
cash and cash in hand as per books and check its
accuracy and propriety.
8.7 Review the reasonableness of the amount of imprest.
 AUDIT PROGRAM
C /AP
CLIENT: ______________________________________________

PERIOD: ______________________________________________

SUBJECT: BANK BALANCES AND CASH

Est. Phase/ W/P

Procedures By Comments/Explanations
Hrs. Level Ref.
8.8 Where cash in hand also includes undeposited
cheques, check subsequent credit of these cheques in
bank statement (to ensure that the cheques are genuine
and these are not fabricated to cover up deficiency of
physical cash). If these cheques are not cleared (either
side) these should be reversed back to their individual
account.
8.9 Perform surprise cash count subsequently and
document the exceptions, if any.
8.10 Ensure that the last documents noted during cash
count were actually the last documents. If necessary,
perform cut-off tests.

9. Cash in Transit

9.1 Obtain details of any cash/cheques in transit and

consider any extra-ordinary item.
9.2 Verify subsequent clearance in the bank statements.
9.3 Particularly review any subsequent reversal in the
cash in transit account and consider its reversal as of
the balance sheet date.
9.4 Review deposit slips to ensure that these were actually
deposited as of the balance sheet date before year end.

10. Other Tests

10.1 Obtain bank reconciliations where applicable and

compare balance per books with balance per books
shown in reconciliaiton.
10.2 Review confirmations received from banks for
accuracy with books for all balances and with balance
shown in bank reconciliation and bank statements
(where applicable).
10.3 Review bank reconciliations (and check casts of
reconciliations), noting at what intervals and how long
after cut-off date these are prepared. If not prepared at
least monthly and reasonably soon after the date upto
which reconciliation is prepared consider this for
management letter and if very late for exception in
auditors report.

10.4 Check subsequent clearance of reconciling items by

reference to subsequent bank statements and bank
records.
 AUDIT PROGRAM
C /AP
CLIENT: ______________________________________________

PERIOD: ______________________________________________

SUBJECT: BANK BALANCES AND CASH

Est. Phase/ W/P

Procedures By Comments/Explanations
Hrs. Level Ref.
10.5 Items recorded by other bank / branch but not
responded by client should be particularly reviewed
by reference to relevant correspondence etc. for
appropriate reasons for delay. Old items should be
particularly reviewed.
10.6 Deposits by client not responded by bank within a
reasonable time should be reviewed against relevant
correspondence and considered for M.L if satisfactory
explanations is not received.
10.7 Large and unusual uncleared items should be
particularly examined by reference to original
documents / vouchers and correspondence for follow-
up procedures.
10.8 Ensure that there are no unrecorded differences.
10.9 Ensure that foreign currency balances are being
converted to local currency at appropriate rates at
year-end, consistent with the bank’s policy and with
policy of previous year.
10.10 Where mark-up / interest is receivable on deposits test
calculation thereof.
10.11 Call lending:

 Ensure that lending proposal is approved by the

authorised personnels.
 Check that deal slip is made for the transaction.
 Check that entry is made in the general ledger
 Check that SBP’s cheque has been issued to the
borrower bank
 Follow-up for the rate of mark-up and ensure that
appropriate changes were made as per the market
fluctuations.
 Ensure that mark-up is accrued and taken to income
on timely basis.

10.12 Ensure that “due from” balances are properly

disclosed, classified and described in the financial
statements in conformity with the prescribed
accounting principle and relevant statute.

Other tests as deemed necessary

 AUDIT PROGRAM
C /AP
CLIENT: ______________________________________________

PERIOD: ______________________________________________

SUBJECT: BANK BALANCES AND CASH

Est. Phase/ W/P

Procedures By Comments/Explanations
Hrs. Level Ref.
Management Letter

Prepare management letter points including:

 Internal control weaknesses.

 Business improvement opportunities.
 Legal non-compliance.
 Accounting system deficiencies.
 Errors and irregularities not material at the
financial statements level.

Disclosure

Ensure appropriate disclosure in accordance with the

reporting framework and fill relevant portion of
FSDCL.

Supervision, review and conclusion

1. Perform Senior review and supervision.

2. Resolve Senior review points.
3. Resolve Partner and Manager review points.
4. Conclude response to the audit objectives.

Audit conclusion

Based on the substantive test procedures, I/we performed as outlined above, it is my/our opinion that the audit objectives set forth at
the beginning of this audit program have been achieved, except as follows:

___________________________________________________________________________________________________________

___________________________________________________________________________________________________________

___________________________________________________________________________________________________________

______________ ___________ ________ _______

Date:____________ Work Performer Job Incharge Manager Partner