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 .

NEWS

IRS sets start date for tax season

The IRS announced that tax season will start in late January and that it will issue refunds to taxpayers despite the partial shutdown of the federal government.

PODCAST

Why CPAs can’t wait on automation tools

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.