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ANNEX - A.2.6 Audit Program - Current Liabilities Accounts: Accounts Payable

This audit program outlines procedures to audit the current liabilities account of accounts payable. The objectives are to determine if (1) recorded liabilities represent legitimate obligations, (2) liabilities are properly stated, classified, and presented in the balance sheet with appropriate disclosures. The procedures include analyzing account balances, tracing entries, confirming payables, examining aging reports, investigating outstanding payables, and ensuring compliance with accounting standards. Upon completing the procedures, the auditor will prepare observations and adjustments as needed to conclude on meeting the audit objectives.

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40 views

ANNEX - A.2.6 Audit Program - Current Liabilities Accounts: Accounts Payable

This audit program outlines procedures to audit the current liabilities account of accounts payable. The objectives are to determine if (1) recorded liabilities represent legitimate obligations, (2) liabilities are properly stated, classified, and presented in the balance sheet with appropriate disclosures. The procedures include analyzing account balances, tracing entries, confirming payables, examining aging reports, investigating outstanding payables, and ensuring compliance with accounting standards. Upon completing the procedures, the auditor will prepare observations and adjustments as needed to conclude on meeting the audit objectives.

Uploaded by

noemi alvarez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ANNEX – A.2.

AUDIT PROGRAM – CURRENT LIABILITIES

Accounts: Accounts Payable

Audit Objectives: To determine whether (a) recorded outstanding liabilities represent legitimate obligations of the agency as of balance sheet
date (rights and obligations, completeness, regularity); (b) current liabilities are properly stated, consistently classified and
presented in the Balance Sheet, and disclosures are appropriate (Presentation, Disclosure)

Estimated Mandays:__________________________

Audit Procedures Assigned Points Total Points


Simple Complex Simple Complex
Rights and Obligations, Completeness, Regularity

1. Prepare an analysis of the account for the period covered. Start with beginning
balance per books, add monthly credits and deduct monthly debits as shown in
general ledger.

2. Trace the beginning balance to last year’s ending balance and the monthly
debit/credit entries to the corresponding journals.

3. Obtain from management Schedule and Aging of Accounts Payable.

4. Select accounts with significant balances and confirm on “blind”1 basis by direct

1
“blind” confirmation – confirmation letter will not contain amount of payables.
Audit Procedures Assigned Points Total Points
Simple Complex Simple Complex
correspondence with the creditors.

5. Account, tabulate and analyze confirmation results as to its impact on the


validity/reliability of the account balance and investigate unconfirmed accounts and
those disputed by creditors.

6. Trace significant balances in the Aging of Accounts Payable to unpaid


Disbursement Vouchers/General Payroll with supporting documents in the
Accounting Unit for invalid/unsubstantiated payables and those unusual
items/balances that should be reclassified/ adjusted.

7. Investigate outstanding accounts aged two years or more to determine their


legitimacy and possible reversion to the general fund.

8. Check from the Budget Unit approved Obligation Slips (OS) or Budget Utilization
Slip (BUS) of legitimate payables (i.e., Actual delivery was ascertained fulfilled by
contractor/supplier as of BS/TB date.) not included in the schedule of outstanding
payables as of BS/TB date. Take note of those unrecorded payables.

9. Review payables and corresponding payments for the next two months of the
ensuing year to detect unrecorded prior year’s payables .

Presentation and Disclosure

10. Compare presentation of the accounts with those required under NGAS and/or
GAAP. Ensure that adequate disclosures on significant matters pertaining to the
accounts are made in the Notes to Financial Statements.

11. Prepare audit observations and propose adjusting entries as appropriate.


Conclude in response to the audit objectives.

12. Supervision and review.


Audit Procedures Assigned Points Total Points
Simple Complex Simple Complex
13. Clear review points.

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