Assertions (COVER)

1. Completeness (Cut-off, Proof of Cash)

2. Obligations

3. Valuation (Face Value, Exchange Rate, NRV)

4. Existence (Cash Count, Bank Reconciliation, Interbank Transactions)

5. Rights

Composition of Cash

1. Cash on Hand = includes undeposited currency and coins, undeposited checks (payable to the entity
or bearer), bank drafts and money orders.

2. Cash in Bank = demand deposit, checking account and saving deposit that are NOT legally restricted.

3. Cash Fund = are set aside for CURRENT purposes such as petty cash fund, payroll fund and dividend
fund.

Composition of Cash Equivalents

*Commercial Paper / Money Market Instrument / Time Deposit / Treasury Bills

acquired at MOST three months before maturity.

Initial Valuation

*Face Value

Subsequent Valuation

*General Rule = Face Value

*Except:

a. Foreign Currency

*at Current Exchange Rate

b. Cash in Financial Institutions with Financial Difficulty or in Bankruptcy

*lower of NRV or Face Value