Chinese businesses have heaved huge piles of cash in IPOs; however they frequently have slight use for it since the business makes all they require. Consequently, cash is repeatedly the main item on the balance sheet. From an auditor’s viewpoint, cash is the simplest and scariest asset to check.
Audit actions for cash are constructed around the sovereign authentication. The auditor sends a confirmation to the bank, which replies validating the balance. This work is frequently done by the most subordinate of staff, as it is simple, but it can effect in stunning audit malfunctions if it is not prepared right. Confirmations are easily forged in China, therefore many much is lost.
