  It is not too much to say that the monthly audit of the Exchange books is usually done poorly and inefficiently. This is due to several causes. In the first place, very few officers have ever had experience fitting them for such a task, and still fewer have any liking for the operation. The average audit consists of counting the cash and seeing if the vouchers to the cash account are correct, but a proper audit is something different. The Council should expect, as a result of the audit, a clear statement of the status of the Exchange together with recommendations for improvement and reports of any irregularities, etc. An auditing officer who spends his time finding out whether or not the books contain any mistakes in addition is not performing his proper functions as auditor. Reduced to its simplest terms the duties of an auditor may be expressed as finding the correct answers to the following:— (a) Were all assets on hand as shown? (b) Were there any assets not shown? (c) Were all the liabilities real ones? (d) Were all liabilities shown? (e) Were all liabilities properly incurred? (f) Were all earnings accounted for? (g) Were any earnings omitted from the statement? (h) Were all disbursements, expenses and losses properly stated and supported? In the following pages an attempt will be made to lay down a system of procedure which will enable the auditor to secure proper answers to the above questions in the most expeditious manner. For this purpose, the use of Form 33, shown below, is recommended. They should be on sheets conforming in size and punching to those used in the book used for recording the proceedings of the Exchange Council. This remark also applies to Forms 16 and 32, previously described. Form No. 33. STATEMENT OF AUDIT OF POST EXCHANGE, FORT HANCOCK, N. J. For the month ending March 31, 1915. I certify that the cash balance of the Post Exchange, Fort Hancock, N. J., on the 31st day of March, 1915, was three thousand five hundred forty-two dollars and seventy-six cents ($3,542.76) and was held as follows:—
(Signed) E. A. Brown, AUDITOR’S STATEMENT. 1. Charge Accounts:— Take retained sales slips for at least three different days and select, at random, at least five sales on each. Are these sales entered on Form 9?... Compare several consecutive sales on each day’s record with adding machine and cash register strips.... Are the totals for each of these days entered on the Steward’s daily report, Form 4?... Are these entries on Form 4 supported by clerks’ reports, Form 5, for same totals?... Are the total charge sales on Form 4 correctly transferred to the daily summary shown on Form 7?... Do they check with Form 6?... Has the Bills Receivable account in the Ledger been debited with the total shown on Form 7?... Have amounts shown on Form 7 been credited to the various departments in the Ledger?... Have all credits been entered on Form 6?... Are 2. Cash Sales:— Take the clerks’ reports for the above selected days: are the cash sales and coupon sales shown thereon properly entered on the Steward’s daily report, Form 4?... Do Forms 4 agree with the cash register records?... Are entries on Form 4 correctly transferred to the cash book?... Are totals of department columns in cash book correctly posted to the accounts of the respective departments in the Ledger?... 3. Coupon Sales:— Do the total coupons sales shown on Form 4 for the selected days agree with the cash register records for these days?... Are entries on Form 4 correctly posted to Form 26?... Are total coupon sales for each department shown on Form 26 credited to these departments in the Ledger?... Are total coupon sales debited to Check Account in the Ledger?... Are coupon books on hand safely stored?... Are they correctly accounted for?... What value of coupons issued during the month of which there is no record?... Are total coupons issued during the month correctly credited to Check Account in the Ledger?... Are they properly debited against Bills Receivable, Credit Coupons?... Is there any ground for believing the stated value of coupons outstanding to be erroneous?... Any complaints from men that they are erroneously charged for coupons?... Is total cash received for coupons (shown in cash book) credited in Ledger to Bills Receivable, Credit Coupons?... Deduct from the total coupons entered on all Forms 25 the amounts shown in cash book as received for coupons; is the remainder properly supported by unpaid Forms 19?... Have these unpaid amounts been properly entered on Forms 25 for next pay day?... What efforts made to collect payments on coupons past due?... 4. Stock Records:— Perform or check the following operations on the record of Stock Transactions, Form 27, at selling price:—To inventories at first of month add all stock received during the month, subtract from this the inventory at the end of the month. The remainder should equal the total sales from the respective departments during the month. Any marked discrepancies should be brought to the attention of the Council immediately. (Initials)... Check several copies of Form 28 against corresponding invoices and against Purchase Record; do they agree?... Are these values correctly transferred to Forms 17, BOTH at cost and at selling prices?... Are these Forms 17 correctly transferred to Form 27?... Are totals on Form 27 properly charged against the various departments in the Ledger and on the Statement?... Are inventories entered properly in each department’s account in the Ledger?... Under whose supervision was stock taken at the last of the month?... Are results of inventory correctly noted on Statement?... Are all wastages, accidental breakages, etc., entered on the stock records and 5. Purchases:— Check Purchase Record against the Cash Book; do entries correspond?... From “Total Purchases” subtract “Creditors” column in cash book; does the remainder check with the balance shown in the Bills Payable, Merchandise (or Creditors) account in the Ledger; ... with the credit balance shown on the Purchase Record?... Are all bills discounted?... If not, is there any excuse for it?... Who makes purchases? 6. Cash Book:— Check all vouchers against cash book disbursements. Were all expenditures proper ones?... If not, give particulars under remarks. (a) The following vouchers not rec’d back.... (b) Vouchers not supported by canceled checks.... (c) Nos. of outstanding checks.... (d) Total value of same.... (e) Cash found on hand at end of month.... (f) Cash in bank at end of month, per bank statement.... Does total of (d), (e) and (f) agree with Statement?... Look up items (a), (b) and (c) mentioned in preceding audit, are they now complete?... State items lacking.... Does Exchange Officer keep the cash book himself?... Does he attend personally to all cash transactions?... Does any employee have access to the cash after it is turned over to the Exchange Officer?... Cash reserve is $.... 7. Ledger:— Inspect trial balance; is it correct and does the Ledger balance?... Is the system being rigidly adhered to?... Report to the Council any omissions or faults found in the manner of keeping the books. 8. Statements and Balance Sheets:— Check all items on Statement of Income and Profit and Loss against the original entries; do they agree?... What earnings cannot be accounted for?... What earnings are not taken up on the books?... Check all entries on General Balance Sheet against the original entries; do they agree?... Are any assets left off the books?... Were all assets actually on hand as shown?... Are any liabilities left off the books?... Among the liabilities shown, are there any which are not real obligations of the Exchange?... 9. General:— Is copy of Steward’s Report posted for information of customers?... Any books or papers which should be destroyed?... Any recommendations?... If so, submit them to Council in separate report. Remarks.... (Signed) .... |
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