How would auditor vouch the petty cash book maintained on the basis of imprest system
The ‘Imprest
System’ of maintaining petty cash book implies periodical reimbursements of the
amount actually expended by the petty cashier. Actual cash in hand with the
petty cashier plus the total vouchers for payments made since the date of last
reimbursement shall not exceed, at any time, the amount of the imprest. This
system ensures maintenance of petty cash book regularly and up to date.
Possibilities of cash defalcations will also be kept limited to the extent of
the amount of total petty cash.
An Auditor shall
conduct the vouching of the petty cash book according to the following audit
programme:
1) Auditor will commence his work by
ascertaining the name of the petty cashier, the amount of the imprest, by whom
it was fixed and when. He should also ascertain as to who handles petty cash
during the absence of the petty cashier.
2) Auditor will require all the voucher to
be numbered consecutively and filed in that very order. He will also ascertain
the name of the person who is authorised to approve vouches for payments out of
petty cash and also the replenishment of the imprest.
3) Auditor should carry out surprise
counting of petty cash in the hands of the petty cashier and reconcile it with
the balance shown by the petty cash book. All petty cash books, if more than
one are used, must be produced at the same time. Costs and cross costs and also
the postings of the total to the impersonal ledger must be thoroughly checked.
4) Auditor should also compare a few of
the entries for petty cash cheques drawn with the entries in the petty cash
book, with special reference to the dates.
5) All vouchers over a certain amount must
be thoroughly examined by the auditor. Posting of the totals of the impersonal
ledge must also be checked.
6) Auditor should also inspect the postage
books to see that they are regularly balanced and the expenditure appears to be
reasonable. Stamps in hand must also be counted.
7) If the audit takes place sometime after
the date of the balance sheet auditor must check the petty cash transactions to
the date of audit and verify the petty cash balance on that date.
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