Wednesday, July 15, 2009

Audit Program for Collections and Remittances

Collections and Remittances are important in an organization. It must be properly safeguarded against losses, theft and malversation. Audit program for collections and remittances is shown below:

Audit Objectives:

1. To determine that collections and remittances are recorded properly.

2. To establish the existence and amount of unremitted collections in the
hands of collecting officers.

3. To establish the accuracy of the General Ledger account.

Audit Procedures
Analytical Review:

1. Compare reported collections of prior years with current year’s collection. Note material variances.
2. Compare targeted collections for this period with actual collections for the same period. Mark notable variances.

Test of details of balances and transactions:

3. Check entries in the Report of Collections against duplicate ORs. Verify footings and trace to subsidiary accounts. Check remittances reported against actual deposits made.

4. Get a representative sample of duplicate ORs. Confirm with the payees by sending out confirmation letters with focus on amounts paid and nature of imported cargo.

5. Examine ORs for:
-amounts and dates
-mode of payment, whether cash or check
-account distribution and fund classification
-numerical sequence
-erasures and alterations

6. Check numerical sequence of ORs issued against monthly report of accountable forms

7. Examine reported deposits for:
-fund classification
-erasures and alterations

8. Check reported deposits by confirming with the
depository bank thru the Resident Auditor
assigned thereat.
9. Trace entries in the General Ledger account to the entries in the appropriate journal. Verify footings and balance.
10. Check entries in the journals against those in the records/reports.
11. Conduct cash examination on the cash and
accounts of the collecting officers.

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