Hope you could help me on this:
The BPP study text says,
“If auditors suspect teeming and lading has occurred, detailed testing will be required on cash receipts, particularly on prompt posting of cash receipt.”
What procedure should I perform to identify whether cash receipts are posted promptly or not? I’m thinking of comparing the dates on the cashbook with the dates the cash receipts were posted the individual sales ledger accounts, is this okay?
If the cheques received from customers were not recorded on the cash book (due to multiple employees in collusion), would there be other suitable procedures an auditor can perform?
It can be difficult.
One way might be to observe the mail being opened then to see when the records were updated. However, observation changes behaviour.
Teeming and lading is now less common because od cash being transferred by Internet rather than by cheques. So, don’t worry about it too much.
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