Auditors Will Often Prepare a Proof of Cash When the Client

question 20

Essay

Auditors will often prepare a proof of cash when the client has material internal control weaknesses in cash receipts and cash disbursements. The purpose of the proof of cash is to determine the client's accounting records for cash are reliable. List below the four requirements the proof of cash is designed to provide for the auditor.

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Definitions:

Accounting System

An accounting system is the method by which financial information is collected, processed, and reported to stakeholders.

Marketing Research

The systematic gathering, recording, and analysis of data and information about customers, competitors, and the market to improve marketing decision-making.

Discontinued Operations

Parts of a company's core business or product lines that have been sold, disposed of, or terminated, no longer continuing its previous course of operation.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence.