Valuation and Petty-cash - Cash and Bank Balances

Valuation

Till recently, valuation of banks and cash balances was got for granted till several financial institutions started to fail and this brought into query the value of balances maintained along with marginal banking institutions. Consequently as a further test, the auditor must establish such the balances are maintained in a reputable bank that is although a going relative.

Petty-cash

Petty-cash balances are generally not material. They are generally counted through the auditor although this is just because most organizations hold the view such a cash count is an integral part of auditing. As well as possible all cash balances should be counted at the similar time to prevent the possibility of substitution. Such count must be performed in the presence of the petty-cashier who has to be asked to sign the count-sheet, and the count-sheet should be signed also, dated through the auditor. The petty-cashier's presence is significant as the auditor could later be held liable for any shortages. This area is justified whenever the client maintains an impress system. The auditor should contain a certificate from the cashier.