Date of audit:
Name of Auditor: ___________________________________ __________________________________
Table 1: Audit checklist
1.1 At start or before the audit, establish the time frame to audit and have there been changes to the existing scope.
Area to audit: Cash
2.1 What is the process for signing checks?
2.2 Run the check register, run the general ledger detail for the specified audit period.
Check voided checks against the ledger detail.
Are there any posted dated checks?
Are there any back-dated checks?
Locate voided checks on the general ledger.
What is the process for uncashed checks?
Does the organization participate in unclaimed property?
Pull the bank statement, cross-check a minimum of ten checks for:
- Display posting in the DMS system, cross reference against the original posting or schedules if available
Run the cash receipt register
Check voided receipts in the cash receipt area against the general ledger
Is there a policy for back-dating receipts?
Are cash receipts posted in the DMS system?
Pull ten deposits from the established audit period:
- Confirm the deposit amount against the ledger and bank statements
- Display the posting, cross reference against the general ledger or DMS schedules if available
2.4 Bank Reconciliation
Is there an approval process in place for checks issued by the organization?
Verify deposits, checks, outstanding items in the reconciliation process
Confirm if the ledger balance on the reconciliation matches the ledger balance on the DMS
Run a check register of all outstanding checks
Beginning with the outstanding checks cross-check the dates against the DMS system
Are the outstanding checks in sequential order?
Pull the outstanding checks, review the request for payment
Confirm the outstanding checks if more than 30 days old, were they outstanding on the prior
Pull all outstanding deposits
Run a cash receipt register of all outstanding cash receipts
Obtain the back-up for all outstanding deposits
Confirm the outstanding deposits, if more than 30 days old, were they outstanding on the
prior month reconciliation?
Credit card deposit
Obtain the backup for all outstanding credit card deposits
Confirm the outstanding deposits if more than 30 days old, were they outstanding on the prior
Confirm process for recording credit card deposits
Are credit card transactions recorded through the assigned cash receipt application?
Area to audit: Payroll Checks
3.0 Confirm process for recording all commission payable checks include commissions paid based
on net profit
3.1 Confirm commissions are accrued for in the correct period
3.2 Confirm commissions are paid in the correct period after the accrual
3.3 Obtain the general ledger display where the payroll accrual is recorded, compare accrual and payroll checks, are there any adjustments?
Select at least ten employees with various pay types
Request or obtain copies of their pay plans (ten selected employees) depending on the
organization, hourly employees may not have a pay plan, check the last authorized
pay change form.
3.4 Using the pay plan, financials or doc/mis re-calculate each employee’s compensation. (If it’s based on the net, request the doc/mis or financial that was used to calculate that accrual
3.5 Referring to the general ledger, verify the account numbers used to post each accrual
3.6 Verify when employees are allowed to review their timecard and commission worksheet
3.7 Confirm when supervisors review timecards and commission worksheet
3.8 Confirm the process for over-time approval
3.9 Does the general manager or operations manager pass out checks or checks stubs to all quarterly
Area to audit: Accounts Receivable
- Confirm the process for monthly statements, where is the trial balance stored and when are statements mailed
4.1 Review the accounts receivable collection process
4.2 Confirm the process upon receipt of funds
4.3 Discuss the process if payments are misapplied in error
4.4 Is there a list of preferred AR Vendors
4.5 Does the organization grant credit to individuals
4.6 Are there written guidelines for the aging process
4.7 Request a vendor list generated by the DMS system
4.8 Request, the vendor file, review the background check process in place for granting credit
What is the approval process for new application and vendor accounts?
Where are current sales tax certificates stored?
How often are sales tax certificates audited?
Where are applications stored after their approved or declined?
What is the method for assigning a new vendor an account number?
Using the parts and service file, pull twenty invoices (minimum) utilizing the DMS system
confirm the total invoice is correctly posted to the correct accounts receivable vendor number.
4.9 When are accounts receivable meetings conducted, who attends and is the resolution process
Area to audit: Fixed assets
- Does the dealership or organization have a formal documented process for fixed assets?
5.1 Has the dealership established the dollar amount (is there a minimum amount) for fixed assets
5.2 Is there a requisition process in place before the fixed asset is purchased?
5.3 What is the process for assigning lives to fixed assets?
5.4 When was the last fixed asset audit?
5.5 In the DMS system are there segregated balance sheet and expense accounts for fixed assets
5.6 Obtain a ledger detail on the balance sheet accounts for fixed assets
Randomly select assets from the ledger detail provided
Request copies of invoices and the attached authorization
Confirm the asset is booked to the correct ledger account
Review if the asset is assigned the correct life
5.7 Are there separate accounts for the fixed asset inventory, depreciation and expense accounts?
Area to audit: Prepaid
6.0 Prepaid definedare assets representing expenditures for future benefits which will be
expensedover a period, as such benefits accrue. An example is prepaid advertising or
prepaid postage. Items such as chargebacks are not an asset.
6.1 Is there a segregated general ledger detail or schedule utilized for prepaid?
6.2 Review the prepaid expense process
6.3 Review the pre-determined amount of assets that can be posted to the prepaid account
6.4 Review the purpose of the prepaid account and general ledger detail or schedule