CA Inter P5 · Chapter 5 · Question 7 of 12
In verifying cash in hand of Uday Hotels Ltd. at several counters, which of the following is NOT good audit practice?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Allowing each cashier to count the cash in the auditor's absence and later obtaining a signed certificate of the amount
Explanation
The auditor should personally count or observe the count, in the cashier's presence, with simultaneous counts or sealing to prevent shifting of cash between locations, and should consider surprise counts. Relying on a cashier's certificate prepared without the auditor's observation provides weak evidence and defeats the purpose of physical verification.
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