Acca aa s21 Notes

5. The cash system
Receive cash
Hold/Bank
Payment
Again, there is an overlap here with the sales and purchases systems. Looking at these from the 
perspective of the cash system, there must be controls to ensure that:
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All cash received is recorded accurately
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Cash is held securely (so cannot be stolen)
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Cash is banked promptly and intact
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Only authorised payments can be made
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All payments are accurately recorded
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6. Non-current assets
Acquire
Depreciate
Dispose
This system overlaps with the cash system – payments for acquisitions and receipts of disposal 
proceeds. There are also parallels, if not overlaps, with other systems:
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As for purchases, acquisitions must be authorised (most likely by the board) and completely and 
accurately recorded
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As for inventory, assets must be safeguarded and accurate records (the non-current asset 
register) maintained 
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As for sales, disposals must be approved and completely and accurately recorded.
Control objectives that are specific to non-current assets include ensuring that:
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Only capital expenditure is recognised as an asset 
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All assets (except land) are depreciated at appropriate rates over their useful lives
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Assets are adequately maintained and insured
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Documents of title are safely kept (eg title deeds to a property held by the bank)
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