Question

Prompt: Using your analysis of the business environment of RNS from Milestone One, as well as your textbook reading on planning an audit of cash accounts, write an audit program (plan) that could be used to evaluate RNS’s internal controls for cash. Be sure your program addresses each component of internal control

Write an audit program for internal control of cash in Word or Excel. The following internal control components must be included:

A. Control environment

B. Risk assessment

C. Control activities

D. Information and communication

E. Monitoring

Answer 1

Audit program for internal control of cash in Word .

File Home Insert Design Layout References Mailings Review View Tell me what you want to do... Sign in 25 * Cut Es Copy Calibri (Body) - 11 -Å Aa- :- AL AaBbccdd AaBbccdd AaBbci AaBbccc AaB AabbCD AaBbccdd AaBbccdd AaBbccdd AaBbCcDc AaBbccdd 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis Intense E... Strong Quote Find ab Replace hs Select Paste B IU - abe X, X? A - aby - Format Painter Clipboard Font Paragraph Styles Editing Answer: While internal control should be designed for every aspect of a business's operation, the controls for cash are arguably among the most important. Since cash is the most liquid asset and the easiest for people to convert for their own needs, it is often the easiest thing to steal or misreport. Therefore, the internal controls associated with cash must be more stringent Audit program for internal control of cash: A. Control environment- Every business is different. A business comprised of five people will demand different controls than a company with 500 people. Prior to establishing any set of internal controls, you should consider the business's management philosophy, the integrity of the employees, and the legal requirements established by the state and federal government. B. Risk assessment-You should consider how a business's cash is at risk. Are large amounts of cash kept where employees have access to it? Who is responsible for receiving and depositing cash? Who is responsible for giving cash to settle debts? These are the types of questions that address what possible risks a business may face when it comes to cash. C. Control activities- Control activities are steps that a business takes to minimize risks. Examples of control activities include having different employees being responsible for different parts of the transaction. An example of a control activity would be having one person selling the product, another person receiving the money from the sale, and a third person checking to make sure that the agreed sales price equals what was deposited. D. Information and communication - Control activities must be designed and then executed by relying on information to be communicated between the people who control different aspects of the transaction. To minimize errors and fraud, the correct information must flow to the right people in a timely manner. E. Monitoring- The entire process must be reviewed by upper level management to ensure that every person is complying with their responsibilities. It is also generally required that the business audits its books and review its internal controls at least annually.