# Cash Count Audit Procedures for Petty Cash and Tills

- Author: PreciseBankFlow (https://www.precisebankflow.com)
- Published: 2026-01-27
- Updated: 2026-01-27
- Category: Bank statements in an audit
- Canonical: https://www.precisebankflow.com/blog/cash-count-audit-procedures

> Cash count audit procedures: surprise counts, counting all funds at once, custodian sign-off and how to document a shortage in the workpapers.
Cash count audit procedures test physical cash on hand: petty cash funds, change funds and register tills. The auditor counts without warning, counts every fund at the same time, has the custodian watch and sign the count sheet, and agrees the total of cash plus vouchers to the fund's fixed amount. Any shortage is recorded, explained and escalated.

## Why a cash count audit works only as a surprise

A cash count is only evidence of what was there if the custodian had no chance to prepare. With a day's notice, a custodian who borrowed from the fund can put the money back, write a backdated voucher or move cash from another drawer. An unannounced count removes that window, which is the whole point of counting.

In practice that means the date of the count is not on any schedule the client sees. Arrive, introduce yourself to the custodian's supervisor, and go straight to the fund. Do not let the custodian leave the room or make a call before the count starts. If the cash is in a locked box, ask the custodian to open it in front of you rather than handing you the key to take away.

Two people from the audit team are better than one. One counts aloud, the other records, and both initial the sheet. That protects the auditor as much as the client: if the fund turns out short, nobody can suggest the money went missing during the count.

## Should every cash fund be counted at the same moment?

Every fund under the same custodian or in the same location should be counted at once, or sealed until it can be counted. Otherwise a shortage in the first fund can be covered by cash carried in from the second while you are busy. Sealing means a signed tape or bag closure that you check before opening.

The same applies to anything that can be turned into cash quickly. Undeposited customer checks, postage, gift cards and transit passes kept with the fund should be listed on the count sheet. A pile of checks waiting for deposit is worth particular attention: trace them later to the bank statement to confirm they were deposited in full and on time. The [cash lead schedule](/blog/cash-lead-schedule) is where each counted fund's total should land, alongside the bank accounts, so the cash figure on the balance sheet is fully accounted for.

For a retailer with many tills, counting all of them at once may not be possible. Pick a sample, count those tills at the same moment, and choose the sample without telling the client which ones in advance. The ideas in [sampling bank transactions for audit tests](/blog/audit-sampling-bank-transactions) on selecting and sizing a sample apply to tills as well as to statement lines.

## The cash count sheet: denominations, vouchers and custodian signature

The cash count sheet is the workpaper that proves what you found. It lists each denomination and its total, every receipt or voucher in the fund, the fixed amount the fund should hold, and the difference. The custodian signs it at the end to confirm the count was made in their presence and the cash was returned to them.

Below is an example sheet for a petty cash fund with a fixed amount of 500.00. All values are made up for illustration.

| Item | Count | Amount |
| --- | ---: | ---: |
| 20.00 notes | 9 | 180.00 |
| 10.00 notes | 6 | 60.00 |
| 5.00 notes | 4 | 20.00 |
| 1.00 notes | 13 | 13.00 |
| Coins | | 7.40 |
| **Cash on hand** | | **280.40** |
| Voucher 1041, office supplies, receipt attached | | 62.15 |
| Voucher 1042, courier, receipt attached | | 38.00 |
| Voucher 1043, staff lunch, no receipt | | 74.20 |
| IOU signed by an employee, undated | | 40.00 |
| **Cash plus vouchers** | | **494.75** |
| Fixed amount of fund | | 500.00 |
| **Shortage** | | **(5.25)** |

Example values only. Add the date, start and end times, location, both counters' initials and the custodian's signature.

Notice that two lines on the sheet are not as good as cash. The voucher without a receipt and the employee IOU are claims, not spending. Record them as found, but mark them for follow-up. An IOU in a petty cash fund is a loan of company money that nobody approved, and a growing pile of them is a control weakness even when the fund balances.

## How does a cash count shortage go in the workpapers?

A shortage goes in the workpapers as a factual finding: the amount, how it was computed, what the custodian said and what you did next. Do not adjust the count to the expected amount, and do not accept a promise to bring in a missing receipt tomorrow without noting the date and the result.

For the example above, the record would show a shortage of 5.25 found at the count, the custodian's explanation in their own words, and whether you later saw evidence that changes it. A difference of a few dollars in a busy fund is usually rounding or a lost receipt. It still gets written down, because the same small difference every year is a pattern.

Larger or repeated shortages need more. Compare the fund's history of replenishments against the vouchers submitted, and look at who approves the replenishment checks. Tell the engagement partner and the client's management in writing. A shortage that the custodian cannot explain is a matter for whoever is charged with governance, not just a passed adjustment.

The audit procedures for the bank accounts that sit next to these funds are set out in the [audit program for bank reconciliation](/blog/audit-procedures-for-bank-reconciliation), and the [meaning of an account reconciliation](/blog/account-reconciliation-meaning) explains how a petty cash fund is reconciled by the client between counts.

## When a cash count is not worth the time

A cash count is not worth the time when the fund is tiny, the risk is low and nothing else points to a problem. A 200.00 petty cash box at a firm with millions in the bank cannot hold a material misstatement, and the count costs more than it tells you. Document why you skipped it.

Two situations reverse that judgment. The first is a business where cash really is material, such as a restaurant, a parking operator or a retailer with many tills: there, physical cash may be a large share of the cash balance and the count is a main procedure. The second is any sign of misuse, such as a tip, a history of shortages or a fund replenished far more often than its size suggests. Then the count is a fraud procedure, and the amount in the box matters less than what the vouchers reveal.

Counts cover the cash in drawers; the bank statements cover the rest. [PreciseBankFlow](/) is built to foot those statements and flag gaps and duplicates, so the bank side of the cash figure is tested on every line while you count the tills.