WORK PROGRAM

Company :
Section : Purchasing and Payment (Expenditure Cycle)
Year :

RISKS AUDIT OBJECTIVES AUDIT STEPS/TESTS Working

Paper Ref.
Note: Program based on presumed or
anticipated conditions. If program is
changed as a result of conditions found
in the field, document the change
accordingly.

OVERALL
OBJECTIVES 1. Prepare/update transaction
flowchart/system notes.

1. Purchases are 2. Review and update the work

proper charges to program.
company.
3. Determine and document
2. Payments are population and sample size.
properly supported
and authorised. 4. By observation and discussion
with key personnel, identify
3. The payee has change, if any, to existing
received cheque internal controls.
payments.
5. Select ___________ items from
4. Purchases and Payment Vouchers.
cheque payments
have been correctly
recorded in the
books.

6. Requisitioning and
Purchasing

Unauthorised Authorisation based on a) Trace to and ensure Purchase

purchases are limits of authority or Requisition Form (PRF) is
made. May lead to company policies approved.
disputes.
b) Compare PRF and purchase
order (PO) to ensure that only
requested items are purchased.

c) Ensure authorised personnel

approve the supplier based on
limits of authority.

1
RISKS AUDIT OBJECTIVES AUDIT STEPS/TESTS Working
Paper Ref.
Note: Program based on presumed or
anticipated conditions. If program is
changed as a result of conditions found
in the field, document the change
accordingly.

7. Receiving (including quality

control)

1. The goods are 1. Ownership of the a) Match PO with supplier’s DO.

not ordered or goods received
specifications b) Ensure there is indication of
not complied receipt and adequate
with. inspection of goods received.

2. Understatement 2. Completeness of c) Trace to expense account to

of goods items recorded ensure that the items are
received in the properly taken up.
records.
3. Accuracy of items
3. Inaccuracy of recorded
items recorded.
8. Accounts payable

1. Claims by suppliers a) Trace to General Ledgers (GL),

1. Purchases are are valid and check suppliers’ original
invalid charges invoices / bills. For progress
to the company claims from contractors, check
to Certificate from Consultant.

2. Accuracy and b) Ensure any accruals are

2. Purchases not completeness promptly recorded in the
properly accounts.
recorded
3. Company not c) Ensure progress claims are as
3. Legal actions exposed to legal per agreement with Contractor.
taken by action
suppliers d) For variation order, ensure it is
supported and approved by
authorised personnel.

e) Review Creditors List’ ageing

for long outstanding liabilities.

9. Payments

1. Payments properly a) Ensure pre-numbered payment

1. Unauthorised prepared and vouchers (PV) are used.
payments are authorised
made

2
RISKS AUDIT OBJECTIVES AUDIT STEPS/TESTS Working
Paper Ref.
Note: Program based on presumed or
anticipated conditions. If program is
changed as a result of conditions found
in the field, document the change
accordingly.

2. Payments properly b) Ensure PVs are properly

2. Credit terms supported supported by original
granted by supporting documents and
suppliers not approved.
utilised
3. Accuracy and c) Supporting documents are
completeness verified/checked and approved
for payment.

d) Payments are properly recorded

in the cash book.

To ensure 10. For ______ months, check

The documents are completeness serial continuity of:
used for
unauthorised a) PR
purposed b) PO
c) Payment vouchers
d) Debit notes

11. Ensure the following functions

Abuse of power and To ensure proper are segregated:
fraud authorisation and
execution of a) Between ordering, receiving,
transactions account payable.

b) Between cheque preparation,

approval of payment vouchers
and signing of cheques

12. Examine system of

Understatement of To ensure all reconciliation of creditors’
Liabilities transactions are ledger balances with creditors’
recorded on timely statements. Ensure that:
basis
a) Statements are obtained
timely from all suppliers and
reconciled.

b) Proper procedures are being

followed for all reconciling
items.

13. Review panel of suppliers (if

1. Favouritism To ensure competitive any) for effort to develop new

3
RISKS AUDIT OBJECTIVES AUDIT STEPS/TESTS Working
Paper Ref.
Note: Program based on presumed or
anticipated conditions. If program is
changed as a result of conditions found
in the field, document the change
accordingly.

pricing is obtained suppliers sources.

14. Determine whether there is a

2. Company does policy with respect to
not obtain acceptance of gifts from
competitive suppliers.
pricing
15. Review agreement with
Conflict of interest To ensure no conflict of suppliers.
interest
16. Review the forms used (PR,
Important and To ensure forms are PO, PV etc) for utilisation and
relevant information used optimally adequacy of space for
are not stated information to be recorded.

17. Other steps

__________________________________

__________________________________

__________________________________

18. Clear review points.

19. Prepare ‘Report on Deficiency

Finding’ (if any).

Prepared by : Date :

Reviewed by : Date :