The First Step in Auditing Petty Cash Is to Gain

question 32

Essay

The first step in auditing petty cash is to gain an understanding of the entity's controls over petty cash. Describe some important controls an entity should have over its petty cash fund.

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Definitions:

Population Size

The total number of individuals or units in the population being studied.

Population Parameter

A numerical value that describes a characteristic of an entire population.

Sample Statistic

A sample characteristic, such as a sample mean x, a sample standard deviation s, a sample proportion p, and so on. The value of the sample statistic is used to estimate the value of the corresponding population parameter.

Simple Random Sample

A segment of a statistical population where every individual in the segment is equally likely to be selected.