When auditors begin auditing cash, they follow a standard sequence of work. The exact procedures will be tailored based on the nature of the controls that have been implemented and by the results of the auditors' risk assessment process.

Testing cash involves some standard procedures consistent between all audits as well as tailored procedures based on these introductory steps. Auditors must be mindful of early tests and results to determine how to tailor their procedures to maximize effectiveness and efficiency in cash testing.

Place the general sequence of steps of the audit process (shown below) in the correct order for an audit of cash.

1. Perform further audit procedures-test controls

2. Assess the risks of material misstatement and design further audit procedures (test of controls)

3. Obtain an understanding of control over cash

4. Perform further audit procedures-substantive procedure for cash transactions and balances

5. Use the understanding of the client and its environment to consider inherent risks related to cash