At least for large transactions and transactions close to year end, conduct physical check on existence of goods and services (if these are distant from site where conducting audit, may seek confirmation in writing from appropriate entity’s officials) Review suspense account for un-cleared payments or for inappropriate clearances Reconcile total expenditures on product/material with the amount recorded in the ledger. Check that all material recorded as acquired in the year are charged against that year. For the sample of transactions, check that the documentation (purchase order / purchase authorisation / invoice / delivery receipt / any receiving documentation / payment) is consistent in quantity, pricing, product description (particularly checking for substitution of lower quality/grade product) Check whether the individual items add up to the total given on the voucher / purchase order and the appropriate amounts of tax have been supplied Follow up on any short-fall / substitution / missing items / multiple deliveries to ensure that only what was received was paid for Check that the invoice and payment have proper prices applied (include any negotiated prices or other arrangements) and reflect correct freight charges if applicable. Check also that any payment advances have been properly reflected in the invoice and correspondingly deducted from payment Check arithmetical accuracy of the invoices Check inclusion of applicable guarantees, service support etc. If any products / services to provide maintenance or parts for a product (i.e. an expenditure to service a product previously acquired) are included in the sample of transactions, check that no payments were made for maintenance / replacement parts that should have been covered by warranties. Check in case of late delivery, whether any penalties apply under contract and if so, whether payment was adjusted accordingly Check for any duplicate payments (see application of CAAT / analytical review under Analytical Review activity) Check that proper authority to enter into the acquisition process and that the size of the purchase is within the authority limit of the authorizing officer. (In the cases of large purchases) Check for supporting material to justify the acquisition of materials: identify in budget are proper defining the needs and requirements.
At least for large transactions and transactions close to year end, conduct physical check on existence of goods and services (if these are distant from site where conducting audit, may seek confirmation in writing from appropriate entity’s officials) Review suspense account for un-cleared payments or for inappropriate clearances Reconcile total expenditures on product/material with the amount recorded in the ledger. Check that all material recorded as acquired in the year are charged against that year. For the sample of transactions, check that the documentation (purchase order / purchase authorisation / invoice / delivery receipt / any receiving documentation / payment) is consistent in quantity, pricing, product description (particularly checking for substitution of lower quality/grade product) Check whether the individual items add up to the total given on the voucher / purchase order and the appropriate amounts of tax have been supplied Follow up on any short-fall / substitution / missing items / multiple deliveries to ensure that only what was received was paid for Check that the invoice and payment have proper prices applied (include any negotiated prices or other arrangements) and reflect correct freight charges if applicable. Check also that any payment advances have been properly reflected in the invoice and correspondingly deducted from payment Check arithmetical accuracy of the invoices Check inclusion of applicable guarantees, service support etc. If any products / services to provide maintenance or parts for a product (i.e. an expenditure to service a product previously acquired) are included in the sample of transactions, check that no payments were made for maintenance / replacement parts that should have been covered by warranties. Check in case of late delivery, whether any penalties apply under contract and if so, whether payment was adjusted accordingly Check for any duplicate payments (see application of CAAT / analytical review under Analytical Review activity) Check that proper authority to enter into the acquisition process and that the size of the purchase is within the authority limit of the authorizing officer. (In the cases of large purchases) Check for supporting material to justify the acquisition of materials: identify in budget are proper defining the needs and requirements.
Commercial%20Audit%20Guidelines-Final%2025%20Mar%202010%20.docx