Tài liệu Financial Systems and Auditing Test of Control ppt

Financial Systems and Auditing Test of Control Purchase Cycle Objectives of Control • Purchase only made when there is a genuine need • Value for money is achieved • Goods /services delivered is satisfactory • Liabilities are recorded completely and accurately • Only valid liabilities are paid • Liabilities are paid in sensible, commercial timescale Purchase cycle Identity Need Place Order Delivery Invoice Payment Authorization Approved Supplier / tender Check Quantity / Quality Authorization Authorization Purchase Cycle Process Risks Possible Control Procedure Requisition made and order placed  Order maybe forgotten Wrong goods /services Goods not for business use Goods not needed 1. All order authorized by manager 2. Inventory checked before order placed 3. Written, sequenced purchase order 4. All outstanding order are kept on the file for chasing  May miss out on bulk discounts Best price and quality not obtained 1. Separate ordering department, who plan orders to take accounts of discounts. 2. All new suppliers are chosen by tender process 3. Agreed supplier list 4. Agreed price/terms list 5. Exception reporting of outstanding orders Purchase Cycle continue Process Risks Possible Control Procedure Goods Received (or service enjoyed) Wrong items arrive Poor quality items  Goods are being stolen Goods never arrive 1. Goods logged in on arrival either:  Directly into system or  Goods received note (sequenced prepared or  Supplier’s delivery note incorporated into system grid stamped 2. Warehouse staff checked goods against delivery info and signed if correct 3. Delivery info then passed to Accounts, as authority to pay associated invoice 4. Goods arrival area are kept secure 5. Deliveries only signed for by warehouse manager 6. Once goods are checked in inventory records updated 7. Person made requisition informed of goods arriving continue Process Risks Possible Control Procedure Invoice Received  Wrong items / prices Invoice does not add up  Error in posting in Nominal Ledger Error in posting to Payable Ledger Delay in posting 1. Invoice checked against delivery info and order 2. Invoice calculations are checked 3. Payables ledger control account reconciled regularly 4. Sequence check from GRNs to invoices, to ensure complete posting 5. Exception reporting of outstanding order continue Process Risks Possible Control Procedure Payment made, or Errors in posting to nominal ledger  Payment is stolen Errors in posting to Payables Ledger  Settlement discounts is missed Overall, payment runs must take place when cash is available 1. Control account is reconciled 2. Payments is allocated to specific invoices 3. Where possible, all payment by bank transfer 4. Bank transfer authorized by person with suitable level of authority 5. All cheques signed by Director, who sees supporting documents 6. Larger cheques signed by two Directors 7. Supplier statement reconciled 8. Planning of payments, to ensure cash available and discounts taken 9. Cheque books / stationery kept secure Process Risks Possible Control Procedure Credit Received Credit not accounted for  Return goods are accounted for as despatches and hence sales Wrong amount of credit received 1. All credit notes are sequenced 2. Regular check that sequence complete in accounting records 3. Credit note checked back to original invoice 4. Any goods returned to supplier are marked as return, to ensure GDN not prepared • All documents should be pre numbered in a sequence, so that completeness and validity are easy to verify • All documents should be cross referenced, so that its easy to trace from the original order through to the Accounts • Quality is checked as goods arrive, and any problem led back to Supplier Examples of Control Test Documents Test For Purchase Order 1. Evidence of a sequence check 2. Evidence of approval 3. Adherence to control limit Goods Received Note (GRN) 1. Evidence of sequence check Goods Returned Note 1. Evidence of a sequence check Purchase Invoice 1. Serial numbering 2. Evidence of sequence check 3. Evidence of matching purchase invoices with GRNs and purchase order 4. Evidence for checking casts, extensions and tax treatment 5. Evidence for account coding 6. Initialing invoice grid for work done 7. Approval of purchase invoice for further processing [...]...Examples of Control Test cont Documents Test For Credit Note 1 Evidence of matching credit notes to goods returned notes Payable ledger 1 Evidence of authorization of all adjustments to payables ledger Payables ledger control account 1 Evidence of review of reconciliation of purchase ledger listing 2 Evidence of authorization of adjustments to payables ledger control accounts . Financial Systems and Auditing Test of Control Purchase Cycle Objectives of Control • Purchase only made when there. arrive, and any problem led back to Supplier Examples of Control Test Documents Test For Purchase Order 1. Evidence of a sequence check 2. Evidence of approval