comment of auditor on excess cash balance

what should an auditor comment where a companies cash balance is Rs 4 lacs although its requirement is only Rs 50,0000?

Replies (2)

first of all, what amt is required for the company for day to day transaction is to be decided by management. Its not auditor's responsibility.

Although the auditor feels that the cash balance is excess than requirement, the auditor should increase the substansive proceedure and should satisfy himself that there is no fraud or error as there are lots of chances of fraud when excess cash balance is there.

However, he may rely on internal control proceedure also...

There is no requirement of qualified audit report he can just commnicate this report but, its not compulsory

hope the query is resolved

thanks

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