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The controls described above are designed to 
prevent 
fraud and error in the cash cycle. The most 
important controls designed to 
detect 
fraud and error which may already have taken place are 
reconciliations
. 
Petty cash
should be reconciled whenever there is a need to replenish the float. The vouchers plus the 
remaining cash should equal the original float. If this balances, the only other check needed is to make 
sure that the vouchers are all valid and authorised. 
A 
bank reconciliation
should be done at least once a month. Many businesses, even those with 
sophisticated computer systems, still keep a manual cash book. If not, a printout of the bank record 
from the computer can be used. This is reconciled to the bank statement. There will always be 
differences, but they should come into the following categories. 

Timing differences due to unpresented cheques 

Timing differences due to uncredited lodgements 

Standing orders and direct debits not entered in the cash book 

Bank charges not entered in the cash book 

Funds received by transfer and not recorded in the cash book 
6.5 Reviewing controls 
Controls should be regularly checked and any problems reported to management.
It is not sufficient to set up controls and assume that they work. The control system needs to be 
regularly tested and reviewed by means of an internal audit (see next chapter). This will highlight any 
problems in practice and the internal auditors can make recommendations to the management for 
improvements to the control system. This will help to prevent error and fraud and to improve efficiency. 
 
7
Manual and computerised accounting systems 
 
Most accounting systems are computerised and anyone training to be an accountant should be able to 
work with computerised systems. The most important point to remember is that the