As an auditor, we should also review the reasonableness of petty cash amount held by individual. Petty cash are generally held by invidiual (usually employees of a company) for disbursement of daily expenses / urgent payment when necessary.
Nevertheless, an individual shall not hold petty cash amount far exceeded the amounts required. This is because there is potential risk that individual may mis-appropriate the funds and resulted in financial loss to the Company.
As a result, management should exercise control to review the budgeted petty cash outflow for the month and furnish this petty cash to the person in-charge. It is not ideal for the Company to disburse significant cash amount to an individual. The Company can always top-up the petty cash amount when requested.
Nevertheless, an individual shall not hold petty cash amount far exceeded the amounts required. This is because there is potential risk that individual may mis-appropriate the funds and resulted in financial loss to the Company.
As a result, management should exercise control to review the budgeted petty cash outflow for the month and furnish this petty cash to the person in-charge. It is not ideal for the Company to disburse significant cash amount to an individual. The Company can always top-up the petty cash amount when requested.
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