The document is an audit work program outlining procedures to audit a company's purchasing department and processes. The objectives are to ensure purchases are properly authorized, supported, and recorded, and that purchase returns are properly acknowledged and documented. The work program details planning steps, audit fieldwork procedures like examining purchase requisitions and orders, receipt of goods, and accounting entries. It also lists steps for testing documents, reviewing pre-numbered forms, and comparing purchases to prior periods. The final section covers supervision, review, and conclusions of the audit.
The document is an audit work program outlining procedures to audit a company's purchasing department and processes. The objectives are to ensure purchases are properly authorized, supported, and recorded, and that purchase returns are properly acknowledged and documented. The work program details planning steps, audit fieldwork procedures like examining purchase requisitions and orders, receipt of goods, and accounting entries. It also lists steps for testing documents, reviewing pre-numbered forms, and comparing purchases to prior periods. The final section covers supervision, review, and conclusions of the audit.
The document is an audit work program outlining procedures to audit a company's purchasing department and processes. The objectives are to ensure purchases are properly authorized, supported, and recorded, and that purchase returns are properly acknowledged and documented. The work program details planning steps, audit fieldwork procedures like examining purchase requisitions and orders, receipt of goods, and accounting entries. It also lists steps for testing documents, reviewing pre-numbered forms, and comparing purchases to prior periods. The final section covers supervision, review, and conclusions of the audit.
The document is an audit work program outlining procedures to audit a company's purchasing department and processes. The objectives are to ensure purchases are properly authorized, supported, and recorded, and that purchase returns are properly acknowledged and documented. The work program details planning steps, audit fieldwork procedures like examining purchase requisitions and orders, receipt of goods, and accounting entries. It also lists steps for testing documents, reviewing pre-numbered forms, and comparing purchases to prior periods. The final section covers supervision, review, and conclusions of the audit.
CORPORATE AUDIT DEPARTMENT PURCHASES Period Covered: Dept. / Division
AUDIT OBJECTIVES: • To ascertain that purchases have been authorized and are properly supported and recorded. • Purchase returns and allowances are acknowledged by the supplier and are properly documented.
WP Done Procedures By Date Comment Ref Y/N?
1. Planning 1.1. Obtain specimen signatures and initials of approving officers and personnel involved in procurement. 1.2. Obtain understanding of the company’s policies and procedures relating to purchasing. 1.3. Conduct inspection and inventory on pre-numbered forms.
2. Audit Fieldwork and Procedures
2.1. Obtain a copy of purchase book from Accounting
Access Program, list of purchases from Purchasing Access Program and summary of Receiving Reports from Warehouse Inventory Program.
2.2. Observe and document flow of documents and
segregation of functions.
2.3. Verify company’s transaction cut-offs.
2.4. Perform compliance audit.
Purchasing Department Purchases requisition procedures. • Check if bin cards are maintained to determine if an item is at its minimum quantity and other considerations before requisitions were made. Note other considerations applied.
Canvassing procedures. • Review the adequacy and efficiency canvass procedure.
Purchase Order preparation and approval.
• Determine number of copies and its distribution. • Review signatures of approving officers. • Trace canvass forms to furnished purchase order. AUDIT WORK PROGRAM Page 2 of 3
CORPORATE AUDIT DEPARTMENT PURCHASES Period Covered: Dept. / Division
Warehousing Department
Receipt of Merchandise • Observe physical count and quality inspection of delivered merchandise. • Determine number of copies and distribution of receiving report. • Inquire for forms and procedures applied for goods subject for return to the supplier. • Trace receiving report to the bin card. • Inquire for immediate control over merchandise received.
2.5. Perform test of document.
• Select a supplier’s invoice. Match
specification of merchandise in the invoice against the purchase order and receiving report. • Trace receiving report to accounting entries for timely recording and proper accounting. • Trace posting to supplier’s subsidiary ledger. • Review approval credit memos for purchase returns and other documents authorizing adjustments. • Check signatories of personnel affixed in the forms from requisition to receiving report. Trace to the specimen list of authorized signatories. • Check pricing and clerical accuracy. Recalculate invoices and compare invoice price to purchase order. • Evaluate the adequacy of supporting documents attached on processed vouchers.
2.6. Check pre-numbered forms if properly accounted for.
Trace and compare last document numbers used against accounting records.
2.7. Trace sequence of receiving reports to entries reported
to Accounting.
2.8. Inquire on as per sample items and observe if adequate
procedures exist. AUDIT WORK PROGRAM Page 3 of 3
CORPORATE AUDIT DEPARTMENT PURCHASES Period Covered: Dept. / Division
2.9. Compare purchases, inventories and gross profit
percentages with prior period and account for significant fluctuations.
5.Reporting
o Prepare summary of audit findings /
observations.
o Discuss the audit findings to the appropriate
management level and obtain corrective actions.
o Prepare preliminary Audit Report and submit to
the immediate superiors
o Edit the reports and prepare final Audit Report
6. SUPERVISION, REVIEW AND CONCLUSIONS
a) Conclude responsive to the audit objectives.
b) Prepare points regarding internal controls and other business matters. c) Perform senior review and supervision. d) Clear senior review points.
Audit Program For Inventories and Cost of Goods Sold. The Objectives: A. Consider Internal Control Over Inventories and Cost of Goods Sold (Test of Control) 1
