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Petty Cash Counts, Too

Please note: This item is from our archives and was published in 2002. It is provided for historical reference. The content may be out of date and links may no longer function.

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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?

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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 .