Finding Text
Criteria
Internal control structure should show the custody over cash is segregated and accounted for to prevent thief and ensure accounting data is recorded correctly.
Condition
Of the items selected for testing cash receipt controls, there was no documentation of individuals handling cash, nor physical deposits logged.
Cause/Effect
While cash receipts were recorded in the ledger throughout the year, the supporting documentation did not present controls over cash. The effect was to cause missing documentation and unable to trace and agree on testing items to the deposit log.
Recommendation
The receivable process should be revamped to include a weekly deposit log that tracks and dates the individual collecting, the amount of money collected, the individual who deposited the funds, the purpose/reason for the funds, and includes account coding. After the deposit is made, all documents should be filed away together. If documented and the process is entirely followed by all those individuals handling cash, then receipts will be properly and easily recorded to ensure fairly statement monthly financial statements