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/ Division

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Period Covered:

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. Procedures 1. Planning WP Ref Done Y/N? By Date Comment

1.1. Obtain specimen signatures and initials of approving

officers and personnel involved in procurement. procedures relating to purchasing. forms.

1.2. Obtain understanding of the companys policies and 1.3. Conduct inspection and inventory on pre-numbered
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 segregation of functions. flow of documents and

2.3. Verify companys 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 CORPORATE AUDIT DEPARTMENT 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 suppliers 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 suppliers 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.

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Period Covered:

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.


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Period Covered:

2.9. Compare purchases, inventories and gross profit percentages with prior period and account for significant fluctuations. 5.Reporting o o o o Prepare summary of audit findings / observations. Discuss the audit findings to the appropriate management level and obtain corrective actions. Prepare preliminary Audit Report and submit to the immediate superiors 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.



Internal Audit

Internal Audit Supervisor