Imagine the CFO of a company has asked you, the auditor, to review the internal controls for cash receipts and to evaluate its cash management of accounts. Prepare a one page letter to the CFO addressing the following questions: Why are internal controls for cash important to the company? What key internal control procedures are critical to safeguard cash and provide accurate procedures for cash receipts? What would you recommend the CFO consider, for managing the collectibility of cash for customers on credit (accounts receivable)?
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