Auditing / Vouching of Cash Book – Receipt Side

Opening Balance:

• It should be checked with the balance shown in the audited balance sheet of the previous year.
• If the closing balance of the cash shown in the balance sheet is the result of many balances, then its break up must be given in the audit working papers.

Cash Sales:

• Carbon copies of the cash receipt or cash sales invoices should be checked.
• In case of automatic records, till record should be checked.
• Prices charging to the customers should be checked.

Cash Received from Debtors:

• The method of allowing the discount to a customer should be checked .
• Any unusual discount should be noted and satisfactory explanation should be obtained from the responsible officer.
• The carbon copy of the receipt or counter folio receipt should be checked with the pay-in-slip.
• Special attention should be given to the amount banked i.e. numbers of cheaques and their amount.
• It should be checked that all bearer / order cheaques received are deposited into bank or not?

Interest Income:

• Interest received on account of fixed deposits in the bank should be checked with the bank statement and the verification of the arithmetical accuracy of its calculation should also be done.
• Interest on saving account should be vouched with the bank advice.
• Interest on any loans granted should vouch with the reference to the agreement with the borrower.
• I.e. rate of interest agreed and charged. Date of payment of interest and due dates.
• Intesest received on securities should be checked with reference to the securities, correspondence exchanged, covering letter in respect of the receipt of the interest and count folio of issued receipts.

Dividend Income:

• Dividend income should be vouched with the:
• Counter folio
• Upper portion of the dividend warrant.
• Letters with which the cheaques for the amount of dividend had been received.

Rent Income Received:

• Lease deeds and agreements should be examined in respect of amounts of rent payable, the date, provision regarding repairs etc.
• Counter folio of the receipts or carbon copies of receipts should be checked.
• Rent received should be checked with the rent rolls.
• If the collection of the rent is done by an agent, then the agent’s statement and details must be carefully checked.

Commission Received:

• Counter folio or carbon copy of the receipt s should be checked with the amount in the cash book.
• The accuracy of the amount should be verified with reference to the agreements with the parties regarding rate of commission and its entitlement of receipts.
• Calculation of the amount received and the basis of the working should be checked.

Subscription Received:

• Auditor must check the Bye-Laws of the association or organization.
• Subscription received should be checked with the counter folio receipt or carbon copy receipt and the register of subscribers.
• Inquiry should be made for any unusual amount of subscription received.

Bill Receivable:

• The amount received against the bill receivable should be vouched with reference to the bill receivable book.
• Inquiries must be made for the Bill receivable which are due for the receipts of money but againt which the amount has been received.

Bad Debts Dividend:

• Receipts from debtors who become bankrupt should be vouched with the dividend warrants received from the official receiver.
• Total debts, rate per rupee payable as dividend and correspondence exchanged between the debtor or the official receiver and the client.

Insurance Claim Money Received:

• Amount received in respect of a claim from an insurance company should be vouched with:
• Correspondence exchanged with the insurance company.
• The amount left by the broker or company.
• Original claim actually lodged / presented.