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Dear tutor,
I’m a little confused about some control activities. For example, one of the objective of cash system is to ensure all transactions are recorded. But a control activity is reconciliation of cash journal to general ledger. I think people will just post the entries in cash journal to general ledger and those are supposed to agree with each other. And how would it be effective and useful to detect misstatement? Thank you.
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I imagine a reconciliation of the cash journal to the general ledger would be beneficial because although it should automatically be posted to the general ledger (eg on computer systems) human error in processing the transactions on the software does still exist, so it’s a method of double checking everything has been processed properly and free from errors.
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