What evidence would an auditor inspect to test cash disbursement controls?

Author: AcadiFi Team

• Related Article: cpa-cash-controls-segregation-duties-audit-evidence
• Related QB: audit-evidence-bank-data-reliability

Answer draft:

The auditor would usually start by understanding the process through inquiry, observation, inspection, and walkthroughs. For operating effectiveness, useful evidence might include bank portal approval logs, invoice packets, vendor master change reports, wire templates, journal entry support, bank reconciliations, reviewer sign-offs, and evidence that the reviewer had direct or read-only access to bank data.

The evidence should match the control being tested. If management says every wire requires dual approval, the auditor should test bank approval logs or comparable system evidence, not just ask the preparer whether approvals happened. If management says reconciliations are independently reviewed, the auditor should inspect the reconciliation, the review evidence, and the reviewer's access restrictions.