AUDIT PROGRAM

Accounts Payable

Assertion Objective Procedures
Valuation or
Allocation
To determine if the
amounts recorded for
accounts payable have
been recorded
correctly.
Enter fictitious payables into the system. Process it using the
clients system and compare the result with the expected output.
Obtain a listing of accounts payable, foot the listing, and agree
it to the general ledger control account.
Trace selected vouchers or vendor accounts to the supporting
documents or subsidiary accounts payable records to verify the
accuracy of the details.
Obtain copies of vendors monthly statements and reconcile the
amounts to the clients accounts payable records.
Reconcile the daily cash disbursements with posting to the
accounts payable subsidiary records.
Completeness To determine if all
transactions affecting
accounts payable that
should have been
recorded are recorded.
Ask management about control activities used to identify
unrecorded payables.
Confirm vendor accounts, including accounts with small or zero
balances.
Vouch large monetary items from the purchases journal and
cash disbursements journal for a limited time after year-end.
Examine the files of unmatched purchase orders, receiving
reports, and vendor invoices for any unrecorded payables.
Examine and test the clients procedures for reviewing vendor
payments lists.
Cut-off To determine if all
transactions affecting
accounts payable have
been recorded in the
correct accounting
period.
Compare the date on receiving report with the date on the
vendors invoice.
Compare the date of the invoice with the date they were
recorded in the accounts payable journal.
Tracing dated receiving reports to voucher register entries and
vouch recorded entries to supporting documentation.

AUDIT PROGRAM
Cash

Assertion Objective Procedures
Valuation or
Allocation
To determine if the
amounts recorded for
cash have been
recorded correctly.
Reconcile the total of electronic cash disbursements transfer
and the checks issued each day with the daily cash
disbursements report.
Foot the total of the cash disbursements journal and verify if it
agrees with the underlying accounting records and the general
ledger control account balance.
Perform a bank reconciliation and account for any differences.
Review the reconciliation of payment transfers with postings to
the cash disbursements journal and accounts payable
subsidiary records.
Enter fictitious disbursements of cash into the system. Click
Pay money to Supplier button. Enter the details. Process it
using the clients system. Go to Reports and examine if the
dummy transactions are reflected in correct amount.
Completeness To determine if all
disbursements of cash
are recorded.
Examine the sequence of checks in the check register.
Ask management about control activities used to identify
unrecorded disbursements.
Vouch large monetary items from the purchases journal and
cash disbursements journal.
Examine and test the clients procedures for reviewing vendor
payments lists.
Existence or
Occurrence
To determine if
recorded cash
disbursements have
occurred.
Examine outstanding checks list to determine that checks are
being processed promptly.
Examine if check issuances contain valid signatures.
Perform a cash count for cash on hand.




AUDIT PROGRAM
Purchases

Assertion Objective Procedures
Occurrence To determine if
purchases recorded by
the entity have
occurred.
The quantity and quality of goods and services received is
documented and agrees with the requisition and performance
expectations such as service level agreements, contract terms,
and vendor performance.
Observe and evaluate proper segregation of duties.
Test a sample of vouchers for the presence of an authorized
purchase order and receiving report.
Examine paid vouchers and supporting documents for
indication of cancellation.
Completeness To determine if all
purchases are
recorded.
Create dummy purchases. Click New Purchase Order and
enter the details. Click Convert to Purchase Invoice then
Update. Look into the Purchase Invoices if the purchases are
recorded and updated.
Review procedures for accounting for numerical sequence of
purchase orders, receiving reports and vouchers.
Trace a sample of receiving reports to their vendor invoices and
vouchers.
Trace a sample of vouchers to the purchases journal.
Valuation or
Allocation
To determine if the
amounts recorded for
purchases have been
recorded correctly.
Recompute the mathematical accuracy of vendor invoice.
Agree information in the sample of vouchers for product,
quantity and price.
Examine reconciliation of vouchers to daily accounts payable
report.
Enter fictitious purchases into the system. Process it using the
clients system and compare the result on the Reports with the
expected output.



AUDIT PROGRAM
Purchase Discounts

Assertion Objective Procedures
Rights and Obligation To determine if the entity has the right
over the purchase discount.
Examine vendors invoices for terms of
the purchase, including the discount
rate and the discount period.
Valuation or Allocation To determine if purchase discounts
are recorded in the correct amount.
Enter dummy purchases with discounts
and examine if the discounts are stated
in the correct amount.
Recompute the mathematical accuracy
of discounts granted by the vendor.
Agree information in the sample of
vouchers for product, quantity and price.
Completeness To determine if all purchase discounts
are recorded.
Obtain a sample of invoices and
vouchers, and trace to the purchases
journal if discounts are recorded.
Trace a sample of receiving reports to
their vendor invoices and vouchers.














AUDIT PROGRAM
Purchase Returns and Allowances

Assertion Objective Procedures
Valuation or Allocation To determine if purchase returns and
allowances are recorded in the correct
amount.
Review the quantity and prices of goods
returned to vendors.
Recompute the mathematical accuracy
of allowances and adjustments to
purchases.
Examine reconciliation of vouchers to
daily accounts payable report.
Completeness To determine if all purchase returns
and allowances are recorded.
Review the use and authorization of
debit memoranda for purchase returns
and allowances.
Examine the accounts payable journal if
the returns and allowances are
reflected.
Create fictitious returns and allowances
and look into the reports if the returns
and allowances are updated.
Existence or Occurrence To determine if purchases recorded
by the entity have occurred.
Observe and evaluate proper
segregation of duties.
Examine vouchers and supporting
documents for indication of cancellation.