Audit Program Accrual AP and Purchase

8/13/2019 Audit Program Accrual AP and Purchase

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Mega Asset ManagementInternal Audit DepartmentSection: Accrual, AP, Purchase ProgramAudit Period:Client:

Document No: Status:Control Step: Date of field work:Procedures to be performed b!ecti"e #ork completed and links Matters

c test the mathematical accuracy of thedetailed accounts payable listing to obtain ahigh level of assurance that accuracy isachieved!

d scan the detailed listing of accountspayable and investigate significant or unusualitems eg. debit balances& large balances& oldunpaid invoices or obvious omissions! and

e Consider whether there are unrecordedliabilities by using our knowledge of the

company and its industry.

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0. f appropriate& by applying targeted testingor non,statistical sampling& for selected vendoraccounts payable balances from the detailedlisting obtain supplier"s statement and:

i reconcile the account detail betweenthe supplier"s statement and the accountspayable detail listing! andii investigate all reconciling items byinquiring with management and agreeingto supporting documentation e.g. vendorinvoices& receiving reports& cashpayments & as necessary. etermine

whether ad3ustments& if any& arenecessary.

f supplier"s statements are not available&consider performing either one or acombination of both of the following:

a %erform accounts payable confirmationprocedures

b 4erify accounts payable balances asfollows:

i for vendor invoices subsequently paid&trace recorded liabilities on the detailedlisting to the disbursement records andcheck advices for that vendor and verifythat the payments relate to the detailaccount balance by agreeing invoiceamounts and numbers! andii for vendor invoices not subsequentlypaid& trace selected recorded liabilities onthe detailed listing to supportingdocumentation e.g.& invoices& receivingreports& purchase orders& suppliers"statements .

*'istence&Occurrence&completeness&

$ccuracy

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5. 6earch for unrecorded liabilities.

Obtain the desired level of assurance bytarget testing for both significant valueinvoices and those sub3ect to higher risk ofinclusion or e'clusion from the proper periode.g. closer to year,end and if furtherassurance is required from tests of details&perform non,statistical sampling of theremaining untested population. 6ampleshould be selected from all accounts payablesources i.e. the disbursement records&invoices received and recorded records&goods received not yet invoiced records andcredits for returns for the period after thebalance sheet date up to the date of thecompletion of fieldwork.

7y reference to supporting documentation&determine whether the item has beenproperly included as a liability or properlye'cluded.

completeness& $ccuracy

8. /est& to an e'tent based on materiality andinherent risk& the translation of accountspayable balances denominated in foreigncurrencies by determining that such accountshave been translated using the correct rateand that the reporting currency amounts havebeen correctly ad3usted.

$ccuracy

9. ist any additional procedures appropriatefor this client by considering the mainmasterdata& as applicable.

;. 6can through < &=e need to scan through < all the items thatwill be tested. /he purpose is to find out

whether there is improper accounting record intheir recording or not.Consider disclosure requirements $ll assertionsConfirm that all relevant financial statementassertions have been addressed fortransactions balances and disclosure.

Prepared $%: &irst 'e"iewed $%: Second 'e"iewed $%:

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Audit Program Accrual AP and Purchase