VENDOR PURCHASING DEPARTMENT

A Employee

B
E

Approved Approved
P.O. MRF

Prepare Prepare
invoice P.O.

Accomp
anied
Invoice with
goods
P.O.

Approve
P.O.

Approved
P.O. B
PURCHASING DEPARTMENT
 G & S Manufacturing
Audit Program
For the Year Then Ended, Dec. 31, 2013

Assertions Audit Objectives

1.Existence/ To determine whether all expenditures showed at the voucher register

Occurrence are authentic expenses occurred in the normal operation of the entity.

2.Completeness/ To determine whether all expenditures are properly included in the

Cutoff company’s record.

3.Accuracy/ To determine whether all amounts are accurately recorded at the

Valuation voucher register.

4.Presentation and To determine whether all expenditures and related accounts are
Disclosure properly classified and disclosed in the financial statements in
accordance with appropriate standard.

Assertions Purpose
Audit Procedures
Existence/ Completeness Valuation Presentation Test of Substantive
Occurrence and Cutoff and and Disclosure Control Testing
Accuracy

1. Vouching of the amounts of ✓ ✓ ✓

the voucher register to that of the
invoice and voucher stamps.

2. Tracing of vouchers and ✓ ✓

invoices to the voucher register

3. Determine if the voucher ✓ ✓

stamp was initialed by the
person-in-charged for checking
of quantities.

4. Scan the vouchers number. ✓ ✓

5. Scan the amounts if there is ✓
unusual fluctuations in the
vouchers.

6. Footing of the accounts in the ✓ ✓

voucher register

7. Cross- Foot whether the sum ✓ ✓

of voucher payable agrees with
the total of the expenses
recorded in the register

8. Recalculate extensions and ✓ ✓

footing of invoices and vouchers.

9. Verification of the accounts ✓ ✓ ✓

charged

10. Inspecting of the related ✓ ✓

documents such as accounting
policy adopted by the entity

11. Examination of the terms and ✓ ✓ ✓

other information indicated on the
invoice

12. Perform cut-off test ✓ ✓ ✓ ✓

G & S Manufacturing
Audit Working Paper- Test of Controls for Disbursement
For the Year then Ended, December 31, 2013

SIGNED AS TO:
Vo. Remarks Effect on the Audit
No.
Quantity Price Extension Distribution
162 X ✓ X X The voucher is paid even Re-compute and check the
though it lacks of three initials. Distribution of cost policy
for identification of the
accounts to be charged.

163 NA X NA ✓ The voucher lacks initials for Taxes before payment

price. should also be reviewed
using the related
documents for tax.

164 NA ✓ NA * The contract price of the Related documents as to

voucher is checked and whether policy adopted by
properly charged to advertising. the entity should also be
reviewed. The accounts to
be charged depend on
whether G & S
Manufacturing uses asset
or expense method.

165 NA ✓ X ✓ There are no initials for Re-compute.

extension. The invoice is also
dated Nov. 30, 2013. It is a
November expense that
appears on the register on
December 2013.

167 * ✓ ✓ ✓ There is inconsistency in the Review of related

initial appears for quantity
portion of the voucher. Instead
of “RC”, “JC” is the initial
appearing on the voucher
stamp. There is also difference
to the address indicated in the
invoice.
documents for verification
of information in the
invoice. Ask the
management for address
differences.

168 X X X * No initials for quantity, prices Review the price.

and extension. Employment contract may
be used. Also, policy
adopted for the distribution
of labor expense should
be checked.

169 ✓ ✓ * ✓ All authorized persons’ initials Propose an entry to the

are present; however, there is management as to the
no need for initials in the conflict in the charging of
extension. accounts.

170 Voucher not listed in the Increase professional

register and not found physical. skepticism. Communicate
with the management.
171 NA ✓ NA * Initials applicable to the
voucher are present, however,
it is erroneously charged to
freight in.
172 ✓ ✓ ✓ ✓ All authorized persons’ initials
are present; however, there is
no need for initials in the
extension. The entity paid
beyond the discount period.
There is erroneous charging of
transaction.
173 NA ✓ NA ✓ Signatures applicable to the
voucher are present, however,
considering the nature of the
entity, “why there is towel
service account?”
174 ✓ * ✓ ✓ All initials are present, but there Assess the risk associated
is inconsistency with the initial
for price. Instead of “WJ/ JC”,
“MC” appears. The entity paid
beyond the discount period.
176 NA NA NA ✓ Signature applicable to the
voucher is present, however,
wrong account is charged.
177 X X ✓ * Signature applicable to the
voucher is present, however,
initials for the extension is no
longer needed
178 ✓ ✓ * ✓ All initials are present, but
since the computation is wrong, ownership. Inquire other
the initials for extension should information and review
not be present. The terms are
Net 10 days, FOB destination,
but it is indicated in the voucher
that the steel is received on
January 3, 2014.
Propose an entry to the
management
Checking of the accounts
applicable to the
disbursement. Inquire why
it is charge to that account,
and then weight their
response. If the there is a
conflict, explain.
Inquire other information
regarding the towel
service.
to payment beyond
discount period.
Employee’s records
should also be reviewed to
ensure the identity of
George Olson.
Related documents as to
the methods adopted by
the entity in recording
replenishment of funds
should also be reviewed,
because if the entity uses
imprest system, it should
not be charged to the
payable before payment.
There is a question of
179 NA X * ✓ Initials applicable to the Inquire whether what
voucher are present, but it goods are delivered for
lacks on pricing verification. that freight.
Also, there is no need for
initials on extension. In
examination of the invoice, it
does not indicate for what is
the freight.

180 X X X ✓ Initials applicable to the To ensure charging of

voucher are present. labor expense, policies and
procedures for allocation
should be reviewed.

181 NA ✓ X X It has initials for price, but there Prepare proposed entries
is none for distribution. The and communicate to the
voucher is for rent expense but management.
it does indicate where it
pertains. The invoice is dated
on January 2014.

183 ✓ ✓ ✓ ✓ All authorized persons’ initials Review related documents.

are present. The invoice is Prepare proposed entries
silent as to shipping terms. and communicate to the
Goods are received January 3, management.
2014

184 ✓ ✓ * ✓ All authorized persons’ initials Prepare proposed entries

are present, but it should not and communicate to the
be initialed at extension management.
portion, because there is
incorrect computation.
Rerolling Billets where
previously purchased at 73
dollars per ton on voucher
number 178, but, the entity
acquires the same item to
another supplier at 56 dollars
per ton.

Note:
X- deviation
✓-complied (no conflicts at all)
NA- not applicable but complied
*- with signature but with error or conflict

Other audit findings:

In scanning the voucher numbers, voucher no. 170 is missing and there is a voucher no.
148a, this is inconsistent that pre-numbered documents must be unique. Also, in checking of the
accounts charged, building repairs appeared at the manufacturing expense classification.
Conclusion:

The entity ensures that vouchers are prepared in accordance with the related invoice. If
applicable, four initials must be present before payment of the invoice, however, some vouchers
are paid even though it lacks signature. Signatures are present, but there some deviations and
incorrect charging of accounts, computations, different initial appears on the voucher. Footing of
the amounts should also be done. Review of policies before charging an account may also be
made.