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AP Work Program

The document outlines a comprehensive audit work program for accounts payable, detailing the project team's planning, fieldwork, and reporting phases. It includes specific steps for understanding the audit area, gathering necessary documentation, and evaluating internal controls and processes. The final reporting phase emphasizes drafting and issuing the audit report while ensuring management's agreement on action items and responsibilities.

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2 views

AP Work Program

The document outlines a comprehensive audit work program for accounts payable, detailing the project team's planning, fieldwork, and reporting phases. It includes specific steps for understanding the audit area, gathering necessary documentation, and evaluating internal controls and processes. The final reporting phase emphasizes drafting and issuing the audit report while ensuring management's agreement on action items and responsibilities.

Uploaded by

vee
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
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ACCOUNTS PAYABLE REVIEW AUDIT WORK PROGRAM

PROJECT TEAM (LIST MEMBERS):

Project Timing: Date Comments


Planning
Fieldwork
Report Issuance (Local)
Report Issuance (Worldwide)

Time Project Work Step Initial Index


Planning
1. Planning Meeting – Audit Team
a) Conduct a planning meeting to discuss scope, approach and
timing
b) Determine the appropriate auditee contact
2. Obtain sufficient understanding of the audit area:
a) Determine if an internal audit of this area has been done
previously. Utilize any previous work products for training and
development of the current plan
b) Obtain and review the policy and procedures for AP
c) Use self-assessment material, if appropriate, to have the
auditee evaluate their own control environment prior to the audit
3. Work with the auditee on the scope, approach and timing of the
audit and detailed document request
4. Review any known best practices for the accounts payable process
area and incorporate them into the audit work and audit report, if
appropriate
Fieldwork
1. Conduct an entrance meeting re-establishing the scope and timing
of the review. Establish a schedule for status meetings and open-
communication protocol
2. Obtain the following:
a) Organizational chart for purchasing and AP
b) Policies and procedures for AP, including vendor master-file
setup and maintenance, invoice entry, expense reimbursement,
and payment
c) Policies and procedures for purchasing, including pricing and
approval (negotiating, updates)
d) Signature authorization list – checks and invoice approval
e) AP aging
f) AP detailed trial balance
g) AP check registers
h) Electronic downloads of vendor master file
3. Gain an understanding of procedures for payment processing:
invoices, expense reimbursements, petty cash and special
accounts
4. Observe and document (via flowcharts) processing of payments.
Consider the following points as a guide:
a) Are systems surrounding AP fully integrated? Review current
systems used, including AP, purchasing and receiving

1 Source: www.knowledgeleader.com
Time Project Work Step Initial Index
b) Determine how purchases are priced, how often prices are
monitored for changes, and how freight and sales & use tax is
accounted for
c) Determine process for P.O. and non-P.O. invoices
d) Determine what controls (manual & system) are in place to
avoid duplicate payments
e) Vendor set-up and maintenance procedures, including obtaining
tax ID number for 1099 purposes
f) Determine the process for identifying and applying credits
g) Determine if internal controls are in place throughout the
process
h) Determine of proper segregation of duties exists
i) Determine if payments are properly authorized
j) Determine if invoices are properly authorized and approved on
a timely basis and are matched with proper P.O.
k) Determine if check stocks are appropriately secured
5. Process map the accounts payable process, including purchasing
and receiving to the extent that they impact accounts payable
6. Sample X petty cash voucher requests to determine the following:
a) Receipts attached with request
b) Request properly authorized per internal policy (verify
signature)
7. Sample X invoices paid by manual checks and 25 invoices paid by
system generated checks/payment vouchers to determine the
following:
a) Payment properly authorized per internal policy (verify
signature)
b) Proper backup attached to voucher
c) Appropriate number of signatures present on checks over
certain limits
d) Ensure that taxes are appropriately paid
8. Sample X expense reports to determine the following:
a) Payment properly authorized per internal policy
b) Receipts attached with the request
c) Expense report coded for G/L and department code
9. Determine whether monthly vendor statements are kept on file. If
so, select X credits and determine whether they have been
researched and applied appropriately and in accordance with
company policy
10. Review aging report for credit memos and inquire about unusual
items. Obtain an electronic download and stratify to identify
recurring vendors or other trends
11. Select X purchase contracts and ensure that the prices in the
system are current
12. Obtain and review a recent bank statement and reconciliation.
Inquire about old outstanding items and unusual items. Determine
the procedure for reporting unclaimed property
13. Review the AP aging for unusual items and timeliness. Test as
needed
14. From the electronic vendor master file, determine if duplicate
vendors are in the system
Final
1. Reporting – Draft
a) Prepare preliminary draft of the audit report using the standard
format. Ensure appropriate auditee reviews draft and that any
action items have been discussed with auditee

2 Source: www.knowledgeleader.com
Time Project Work Step Initial Index
2. Reporting – Issuing draft
a) Issue preliminary report to management. At this point,
management/auditee should agree on the timing for
implementing any action items identified and agreed to in the
report. Responsibility for implementation should also be
assigned
b) Validate the accuracy of all audit report content

3 Source: www.knowledgeleader.com

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