Audit and Accounting Procedures in Organizations (with reference to Petty Cash)

Abstract

Over the past few decades, auditing and accounting has gained extreme significance and become a crucial component in the operations of every organization. This is because responsibility is placed on organizations to satisfy all its stakeholders by complying with policies and procedures, which are viewed as ethical in nature by them. Considering the importance of auditing and accounting in the current competitive scenario, organizations have recognized that the proper petty cash auditing and accounting is a vital component in gaining a favorable image within the industry it operates apart from other types and methods of audit. However, there are other factors such as nature of the operations, size of the organization, misappropriation, theft, errors during reconciliation and accounting which affect the results of petty cash auditing and accounting. In view of the importance of auditing and accounting that enables the management for decision making, this study will provide a basic idea about the petty cash auditing, accounting, its impact on the cash balances, the overall liquidity and position within an organization. In addition to the idea and the impact about petty cash auditing and accounting procedures within an organization, this study also helps to find out how the cash used for payment of petty cash expenses utilized effectively and how the unutilized amount is accounted by the organizations. This research study will address about how organizations with the help of its internal and external stakeholders can improve its petty cash auditing and accounting procedures through feedback from all the relevant stakeholders. In addition to the global accounting policy for petty cash auditing and accounting set up by statutory bodies in the field of accounting and auditing, this study will also highlight how confident the management and the employees are about the level of transparency in petty cash auditing and accounting procedures. This study also benefits enthusiastic researchers in the field of finance and treasury who are aspiring and willing to perform advanced research on petty cash accounting and auditing and its impact on the organization’s performance. One of the most common statistical tests i.e. independent sample t-test is used to find out how petty cash audit is viewed among organizations. Through independent t-test, it was found out that the systems put in place for petty cash audit and accounting are adequate but still there exists room for improvement.