Scribd
Upload
109 views

Accounts Payable Invoice Audit Work Program

The document outlines detailed procedures for auditing a company's accounts payable and invoice processing functions. It includes steps to check for [1] proper invoice receipt and approval procedures, [2] accurate processing of invoice details, and [3] appropriate controls over the vendor master file and payments. The procedures also address verification of rebates, duplicate payment prevention, and reconciliation of payables records.

Uploaded by

Rahila Shah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
109 views

Accounts Payable Invoice Audit Work Program

The document outlines detailed procedures for auditing a company's accounts payable and invoice processing functions. It includes steps to check for [1] proper invoice receipt and approval procedures, [2] accurate processing of invoice details, and [3] appropriate controls over the vendor master file and payments. The procedures also address verification of rebates, duplicate payment prevention, and reconciliation of payables records.

Uploaded by

Rahila Shah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

ACCOUNTS PAYABLE INVOICE AUDIT WORK PROGRAM

Performed
Detail Procedures Comment WP Ref by and
Date

1 Accounts Payable/Invoice Function

• Do the people who process invoices for


payment receive all invoices directly from the
mail opener, and are they in control over the
invoices established immediately upon
receipt?

• Does the processing of items for payment


include the following?
− Check of terms, prices and quantities on
invoices against purchase orders
− Check of items and quantities on invoices
against receiving reports obtained directly
from the receiving department (including
partial receipts)
− Mathematical check of footings,
extensions and discounts
− Check of invoice that does not involve
materials or supplies (e.g., fees, rentals,
power and light, taxes, travel, etc.) for
approval by designated people such as
department heads
− A final approval for payment (Who
approves it and how is it documented?)

• Who can authorize price differences on


invoices and for what value?

• Are monitoring controls in place to track


partial shipments against PO quantities for
material/services?

• Are procedures in place for new vendors to


become approved and added to the system?
− Is there written signoff by the end
recipient/user of the goods or services to
be received – not just accounting signoff?
− Preferably, do system controls restrict the
adding and changing to the vendor master
file to those without invoice processing
responsibilities?
− Does a person independent of invoice
processing approve changes?

1 Source: www.knowledgeleader.com
Performed
Detail Procedures Comment WP Ref by and
Date

• Is a log generated and reviewed by


appropriate management to document
changes to the vendor file?
− Is it compared to the approved
add/delete/change form?
− Is evidence of review documented by a
signature or other method?

• If controls over the vendor master file are


weak, are controls in place to verify that
payments are made only to legitimate
vendors providing delivered materials or
services?

• Are adequate procedures established for


processing freight bills?
− Are adequate controls in place over the
processing and entry functions into the
system?
− Are rates on freight bills checked by the
traffic department or someone familiar
with tariffs or by an outside agency?
− Do procedures provide for establishing
that charges for freight and haulage are in
accordance with agreed-upon shipping
arrangements and are checked against
purchase orders, sales invoices, etc.?
− Are freight charges added on vendor’s
invoices similarly checked?
− Are freight charges included in the unit
cost of raw materials? If so, which
materials?

• Does accounting maintain a current list of


people authorized to approve expenditures?

• Does accounting establish control over


invoices received prior to releasing them for
departmental approval and other processing?

• Are rebates, discounts or any other


allowances received from any vendor? If yes,
please describe. What procedures are in
place to verify that all allowances due are
received?

• Are procedures adequate to ensure an


accurate account distribution of all entries
resulting from invoice processing?

• Are invoices ever paid without purchase


orders? If yes, please describe how these

2 Source: www.knowledgeleader.com
Performed
Detail Procedures Comment WP Ref by and
Date

invoices are approved for payment.

• Are payments made only from original


invoices, rather than photocopies?

• What controls are in place to prevent


duplicate payments, invoices canceled or
only original invoices paid?

• Are unmatched purchase orders and


receiving reports and unvouchered vendors’
invoices periodically investigated?

• For services, who is authorized to approve


invoices? How is this monitored?

• Are AP trial balances reconciled to the


general ledger timely?

• Do payables include any notes properly


classified as long or short term?

• Are monthly statements from vendors


regularly reconciled to open vouchers or
accounts payable ledgers?

• Does the plant controller perform a detailed


review of voucher packages and document
the results in the accounts payable audit log?

• Is the supply of unused checks adequately


safeguarded and under the custody of people
who do not sign checks manually, control the
use of the facsimile signature plates or
operate the facsimile signature machine?

• If a check-signing machine is used:


− Are the signature plates properly
safeguarded?
− If the custodian of the plates is not the
machine operator, does the custodian
determine that only authorized checks
have been signed (such as a counting
device on the machine)?

• Are disbursement approvals and check


signing procedures adequate?
− Are invoices and supporting data
furnished to check signers and reviewed
by them prior to signing the check?
− Are signed checks mailed without getting
into the hands of people who requested,

3 Source: www.knowledgeleader.com
Performed
Detail Procedures Comment WP Ref by and
Date

prepared or recorded them?

• Are checks sent as soon as they are run? If


not, are they maintained in a secure area and
reconciled each month? What procedures
are in place to ensure that they are recorded
as a liability until the check is sent?

• Are procedures in place to ensure adequate


cutoff of accounts payable/receipts of
inventory at the time of physical inventory?
Are they performed at month-end?

• Document the process for reviewing,


reconciling and cleaning up the GR/IR
clearing account.

• Obtain and review the GR/IR clearing


account and identify any old or unusual
reconciling items. Obtain management
explanations.

• Document the process for reviewing,


reconciling and cleaning up the freight
clearing account.

• Obtain and review the freight clearing


account and identify any old or unusual
reconciling items. Obtain management
explanations.

• Are all invoices processed for payment


reviewed/approved by the plant manager?
Make sure the plant manager is reviewing
the accounts payable register and signing the
register verifying this review prior to releasing
for payment. Who approves them when
he/she is not available?

• Review a sample of invoices selected from


invoice registers from the last six months to
determine if they are adequately supported
by plant-level documentation.

• Verify that the plant does not have a


checking account or blank checks onsite.

4 Source: www.knowledgeleader.com

You might also like