In short
A proof of cash is a four-column reconciliation of a bank account that reconciles the beginning balance, receipts, disbursements and ending balance per the bank with those per the books.
Key takeaways
- It can reveal receipts or disbursements recorded in the books but not the bank, or the reverse.
- It helps detect concealed theft and unrecorded transactions.
- A regular bank reconciliation compares only the ending balances.
Where it's tested
AUD: Responding to Assessed Risks — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An auditor assesses control risk as very low for the revenue cycle after successfully testing controls. Which statement is correct regarding substantive procedures for revenue?