CAF 09 – Audit and Assurance Control Sheet (by Muhammad Asif, FCA)

Controls over Sales System:

Sales Order Function Despatch Function Invoicing/Billing Function GL/Accounts Function

1. Segregation of Duties
(order, and credit limit)
2. Authorization of credit
limit (by separate dept.)
3. Check credit limit.
4. Check inventory balance.
5. Prenumbered orders.
6. Use authorized rates.
7. Despatch every sales
order.
1. Prenumbered GDN for
every despatch.
2. Cross-check with sales
order and Sign GDN.
3. Acknowledgement of
customer.
4. Daily transfer of GDN to
record in accounts.
1. Segregation of duties 1. Segregation of duties
(order, despatch, invoice). (invoice, recording,
2. Prenumbered Invoice. collection).
3. Recalculation/Cross 2. Batch Totals.
checking of invoice with 3. Control A/C reconciliation
Order & GDN. 4. Monthly Account statements.
4. Prenumbered and 5. Aging analysis to identify
authorized credit notes overdue & follow up.
(cross check with invoice). 6. Authorization of bad debts.

Controls over Purchases System:

Purchase Order Function Receiving Function Invoicing/Billing Function GL/Accounts Function

1. Segregation of Duties 1. Segregation of duties. 1. Segregation of duties 1. Check complete audit trail is
(user and order dept.). 2. Prenumbered GRN for (order, receiving, invoice). available (PO, GRN, Invoice).
2. List of approved every receipt. 2. Recalculation/Cross 2. Batch Totals.
suppliers, with Access 3. Cross-check with purchase checking of invoice with 3. Control A/C reconciliation
controls. order and Sign GRN. Order & GRN. 4. Monthly Account statements.
3. Order only to approved 4. Daily transfer of GRN to 3. Check discount allowed by 5. Prenumbered and authorized
suppliers at lowest record in accounts. suppliers. debit notes
quotation. 4. Prenumbered and
4. Authorization of all authorized of debit notes.
purchase order.
5. Prenumbered orders.

Controls over Payroll System:

Calculating Gross Wages and Calculation of tax and other Payment of wages and Recording payroll in
Salaries deductions salaries accounts
Only for real employees: 1. Use latest rates of tax. 1. Authorization of 1. Use authorized payroll.
1. Segregation of duties (HR & Payroll 2. Authorization of voluntary payments by CFO (total 2. Timely recording.
& Payment) deduction by employees as well as individual). 3. Reconciliation of
2. Authorization of Appointment & 3. Recalculation and approval 2. Confirmation of identity payroll file with
pay by HR. of deduction by before payment (for general ledger.
3. Pay authorized by HR. independent person. cash, as well as bank
4. New employees authorized by HR. transfer)
5. Communication of resigned 3. Reconciliation of
employees salaries payable with
Only for real work: salaries paid.
6. Prenumbered and authorized Time 4. Timely payment of
Sheets (or clock-card system with deductions
monitoring).
7. Approval of overtime & bonus.
8. Use authorized time sheet and rates
Calculated correctly:
9. Range Tests.
10. Recalculation and approval
of payroll by independent person.

Controls over Inventory System:

Physical Safeguarding Valuation of Management of Levels of

Recording Inventory
of Inventory Inventory Inventory
1. Segregation of duties (ordering, custody, 1. Restricted physical 1. Updated Standard 1. Inventory levels.
recording) access. Costing.
2. Inventory records. 2. Inventory count and 2. Identification of slow
3. Accurate and timely recording of receipts reconciliation. moving items.
4. Accurate and timely recording of issues

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 CAF 09 – Audit and Assurance Control Sheet (by Muhammad Asif, FCA)

Controls over Fixed Assets System:

Authorization of additions/deletions Recording of expenditures

1. Authorization of purchases and disposal. 1. Marking of invoices for correct classification.
2. Approval of invoices. 2. Recording in appropriate accounts.
3. Sequential numbering on fixed assets. 3. Reconciliation
4. Updated fixed assets’ register.

Controls over Cash and Bank System:

Cash Receiving Cash Payments Cash Balance Petty Cash

1. Segregation of duties (receiving & 1. Supporting Controls over Cash in hand: 1. Set reasonable limit.
recording) documents 1. Restricted employees to 2. Keep petty cash in a heavy
Controls over cash received 2. Cancellation of receive cash. locked box (or locked drawer)
through Post: documents 2. Heavy locked box in in secured place.
1. Monitor mail-opening process. 3. Authorization of secured place 3. Spending on pre-approved
2. Listing of cash received by payments expenses only.
independent person. 4. Prompt Controls over Bank 4. Spending should be supported
Controls over Cash Sales (at Recording. Balance: by documents and recorded
counter): 1. Established procedures on petty cash voucher.
2. Restricted employees to receive for new bank account. 5. Surprise checks of petty cash
cash. 2. Segregation of duties. by independent person.
3. Till roll or cash receipts for every 3. Secure cheque book. 6. Petty cash expenses should be
transaction. 4. Bank Reconciliation periodically recorded in
4. Reconciliation of cash received and Statement. general ledgers, after review
recording by independent person. 5. Control over devices used by finance manager.
Controls to ensure all money to prepare cheques 7. When petty cash is 'topped
received is banked: electronically. up', the amount of withdrawal
1. Prompt banking. from bank should be equal to
2. Match deposit in bank with receipts total of petty expense
and cash book. recorded.

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