Petty Cash Counts, Too


Some people may not know what to look for when reconciling petty cash and reviewing its controls. Checks and balances should exist in handling, distributing and keeping records. Here is a simple checklist to verify your client’s or company’s safeguards. Don’t forget to count!

1. Are authorized personnel utilizing official petty cash slips for specified expenses or purchases?

Yes__ No__

2. Is each slip signed by the recipient?

Yes__ No__

3. Is each slip approved by the recipient’s supervisor?

Yes__ No__

4. Are original receipts attached for all purchases?

Yes__ No__

5. Is the petty cash kept locked in a safe place, such as a special cash drawer, with limited access to the key?

Yes__ No__

6. Are any of the petty cash slips received and approved by the same person?

Yes__ No__

7. Is the custodian the same person who signs the check, or are any of the checks signed by and addressed to the same person?

Yes__ No__

8. Are any of the replenishment checks above the established petty cash balance?

Yes__ No__

9. Are any travel- and entertainment-related expenses paid through petty cash?

Yes__ No__

10. Should any purchases have gone through the regular accounts payable process for a more thorough review and stringent approval process?

Yes__ No__

If you answered Yes to the first 5 questions and No to the last 5 questions, you have adequate petty cash controls in place.

Source: Anita F. Geter, CPA, CIA, lead auditor in the internal audit department of Smurfit-Stone Container Corp., Chicago, and a member of the Chicago Chapter of the National Association of Black Accountants. Her e-mail address is ageter@smurfit.com .

QUIZ

Personal happiness and new hires’ pay on the rise

The news of the past couple of weeks hit home with reports on personal financial satisfaction and pay for finance professionals. See how much you know about recent news reports with this quiz.

SPONSORED REPORT

Preventing and detecting fraud at not-for-profits

Organizations in all industries must deal with the potential for fraud to occur, and design controls to prevent and detect it. Environment, policies, and controls can help organizations steer clear of problems.

PROFESSIONAL LIABILITY SPOTLIGHT

The dangers of dabbling

To meet evolving marketplace needs, CPAs often look to diversify their service offerings. Firms can mitigate the risk of experiencing competency-related professional liability claims by implementing these basic steps.