Auditing till cash sales for a retail client
How to audit cash sales for a retail client whose till runs on Achekam: occurrence and completeness, cash-ups, Z reports, day close and banking.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
Cash is the asset most easily taken and the one that leaves the fewest traces. In a busy shop, a sale that is never rung up leaves no invoice, no receivable and no entry in the books. The goods are gone, the cash is in someone's pocket, and the only sign is a stock loss that may be blamed on shoplifting months later.
That is why auditing cash sales is about controls and reconciliations as much as about vouching. This article covers how to audit till cash sales for a retail client in South Africa, Nigeria or Kenya, with specific notes for clients whose tills run on Achekam.
Occurrence and completeness for cash takings
Two assertions pull in opposite directions.
Occurrence. ACCA explains that the occurrence assertion means recorded transactions and events have actually occurred and pertain to the entity. For cash sales, the risk is fictitious sales, perhaps to hide a cash shortage or inflate results before a sale of the business.
Completeness. ACCA explains that a completeness test should start from the underlying documents and trace them to the ledger, to make sure none have been missed. For cash sales, the risk is unrecorded sales, and here lies the difficulty: an unrecorded cash sale has no document to start from.
The answer is to work from the evidence that does exist: the till's own records, the cash counted, the money banked and the stock that left the shelves. Completeness for cash sales is tested indirectly, through controls and analytics, more than through vouching.
Separating receiving cash from recording it
AccountingTools advises that employees who receive cash or cheques from customers should not be the ones who record those transactions in the accounting system. ACCA gives the classic illustration: in a post room receiving cash, the person who records it should be different from the person who opens the post.
At a till the cashier both receives and records, so the separation has to come later in the chain:
- someone other than the cashier counts or checks the drawer at the end of the shift;
- someone other than the cashier compares the count with the till's record;
- someone other than the cashier banks the cash and reconciles the deposit;
- someone with no till access reviews over-and-short patterns by cashier.
Walk through how this works at the client and test whether it happens in practice.
Z reports, cash-ups and cash over and short
Where the client's till runs on Achekam, the cash-up works like this: the cashier counts the drawer by notes and coins, and the server works out the expected cash, records the difference and posts it to cash over and short. Notes and coins are listed for rand, shilling and naira. A till with unsent sales cannot be cashed up, so the count is never compared with a till whose sales the server has not yet received.
A live X report of an open till and a Z report frozen at cash-up can both be opened as PDFs. For the auditor, the Z report is the till's statement of what it recorded, frozen at the point the cashier counted.
Audit tests on this data:
- For a sample of days, agree the Z report totals to the cash-up record and to the expected cash.
- Review cash over and short by cashier and by branch. Frequent small shortages at one till, or regular overages that may hide unrung sales, both need explaining.
- Look for voids, refunds and no-sale openings by cashier, where the till records them.
Day close by someone who was not a cashier that day
In Achekam, a branch's business day is closed by a supervisor or manager who was not a cashier that day. Closing the day freezes its Z reports, payments, VAT by rate and differences. That is the separation of duties described above, enforced at the point the day's figures become final.
Test it: for a sample of day closes, confirm who closed the day and that they did not work a till that day. Ask how the client handles branches with a single staff member on duty, where the rule may push the close to a manager who was not on site, and what checks that manager makes.
Till journals to the ledger
In the client's books on Achekam, every till sale that reaches the server posts a balanced journal in the same step. Each payment method goes to its own account, alongside revenue, output VAT, and cost of sales against inventory at the product's cost price. So cash takings land in the cash account, separate from card, EFT, M-Pesa and gateway payments.
That gives the auditor a clean path from the till to the ledger:
- agree total till sales for a period to revenue and output VAT in the general ledger;
- agree cash takings per the Z reports to the cash account;
- check that cost of sales posted with each sale moves with revenue, and look at gross margin by branch and by month for unexplained dips, which can point to unrecorded sales.
Sampling days and agreeing banking
The strongest single test of cash sales is that the cash reached the bank. For a sample of days:
- Take the cash per the cash-up.
- Agree it to the deposit slip and to the bank statement, allowing for the banking delay the client normally has.
- Investigate any day where the banked amount is less than the counted amount.
In Achekam, Audit Intelligence can risk-score a loaded population, such as a year of day closes, and propose a sample. A reviewer who did not prepare the plan approves it before it is drawn, and each draw can be reproduced from its stored seed. Weight the sample towards days with large over-and-short differences, branch changes and the days around year end. See revenue cut-off testing for the year-end days specifically, and auditing bank and cash for the bank confirmations that close the loop.
ACCA's article on internal controls explains segregation of duties and other controls over cash receipts, and is a useful brief before the walkthrough.
On your next retail audit, start at a branch by watching a cash-up and a day close. What you see there will tell you which of the tests above matter most for this client.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
