Cash Controls


Identify the Control

Match each situation with the correct control type

Daily bank deposits
Bank Control

Manager approval before payment
Authorization

Keeping cash in a locked safe
Physical Control

Different staff receive and record cash
Segregation of Duties


Cash Risk Identification

State the risk in each situation

One employee receives cash and records it.
Risk of fraud or theft due to no segregation of duties.

Cash is kept overnight in an unlocked drawer.
Risk of theft due to lack of physical control.

No receipts are issued for cash sales.
Risk of unrecorded sales and cash misappropriation.

Payments are made without approval.
Risk of unauthorized or unnecessary payments.


Control or No Control?

Indicate whether the following is a good control or poor control

Paying expenses only by cheque
Good Control

Allowing staff to borrow cash from the till
Poor Control

Recording cash sales at the end of the week
Poor Control

Depositing all cash receipts daily
Good Control


Mini Case Study

A small retail shop receives most of its sales in cash. The owner allows one employee to

Receive cash
Record sales
Keep the cash box

No receipts are issued, and cash is deposited once a week.

Questions

Identify three weaknesses in the cash control system.
One person handles receiving, recording, and keeping cash.
No receipts issued for cash sales.
Cash is deposited only once a week.

Suggest two controls that could improve cash safety.
Issue receipts for all cash sales.
Separate cash handling and record keeping.
Deposit cash daily.
Use a locked cash box or safe.
Any two earn full marks

Explain why segregation of duties is important in this case.
It reduces the risk of fraud and errors by ensuring no single person controls all aspects of cash handling.


Quick Quiz

Why is cash considered the most risky asset?
Because it is easy to steal and misuse.

What is internal control?
Policies and procedures used to safeguard assets and ensure accurate records.

Name one control used for cash receipts.
Issuing receipts / Daily bank deposits.

Name one control used for cash payments.
Authorization / Payment by cheque.

One person should handle all cash-related tasks.
False

Bank Reconciliation ➧ Here