Company Name: ABC Company
Audit Programme Procure to pay
Audit Objective Activities (What to perform) W.P Ref/comments Audit Procedures (How to perform)
Procurement
- To ensure that procurement is Standard Operating Procedure
Gain understanding from:
done from approved suppliers only. (SOPs)
- Meeting with Head of the department (document the
minutes of the meeting)
- To ensure that procurement
- Review of SOP available
department avoids payment of
- Process description ( update PD if any change in
demurrage charges on imported
practice is noted )
materials.
Compliance with applicable Check applicable regulatory requirements such as
- To ensure that the orders are regulations SEPRA and PEPRA rules for procurement.
timely delivered so that the
Analysis
production is not affected. -Comparisons and trend analysis.
Identify lead time through documents, in order to
ensure that purchase orders are rasied well before need
of stock/raw materials.
-Review the reorder level, EOQ, minimum level and
maximum level determination documents for evidence
of review as per delegation of authority (DOA)
/inventory control procedures.
Assertion N/A
Test of Controls
Obtain and review procurement plan for the period and
ensure an appropriate approval has been taken from
authorized personnel.
For Imports
Perform TOC on procurement files maintained by the
client and ensure that all necessary documents are
attached in that file as per SOP/policy.
Review significant purchase/supply agreements and
investigate:
• The respective expiry/ maturity dates;
• The provisions for renewal of contract;
• Amount of service charges and the period of
payment;
• Escalation clauses; and
• Any other significant terms.
Obtain list of bank accounts opened for the letter of
credit and check approval thereon.
Select sample of purchases during the year esnure
following:
-Ensure that performa invoice and quotations are
called from the approved list of vendors/suppliers and
a comparative statement for approval from head of
department.
-Obtain relevant purchase orders ensuring these are
authorized
-Review of letter of credit application submitted to
purchase manager and check the name of importer and
quantity ordered.
-Review of clearance document ensuring no excessive
time is taken for clearance of material
- Inquire with purchase manager for copy of bill of
lading for imported items
- Inquire regarding the trade intimation from the
clearing agent regarding the arrival of stock and
clearance thereon.
- Review the necessary documents like Certificate of
analysis,packling list,Form 7 and Form 3 submitted to
custom clearance
- Review the copy of pay orders generated for purpose
of payment to importer.
Inquire purchase manager for copy of bill of lading for
imported items.
Review the documents like certificate of analysis,
packing list, etc. submitted to custom clearance.
Review the copy of pay orders generated for purpose
of payment to supplier.
Review the shipment clearance date with GRN
ensuring appropriateness of the document.
Audit Objective Activities (What to perform) W.P Ref/comments Audit Procedures (How to perform)
Procurement
Inquire from the import manager regarding the type of
insurance i.e. on board or on shippment.
Ensure that all insurance cover are taken for import
procurement that is Fire and In-Transit both.
Ensure that agreement with all the transporters are
made by whom consignments are delievered from port
to warehouse and important clauses are written in it.
Ensure that quality inspection is performed at the time of
receiving of stock/material and any claim for
faulty/substandard/mismatched or unsuitable items is
immediately rasied with supplier.
Ensure that transactions are recorded at correct echange rates and
any foreign currency balances are being converted at appropriate
rate ruling at the year-end.
For Local Procurement
Obtain the approved list of vendors/suppliers and inquire
the basis of selection and intervals of updating the list.
Review significant purchase/supply agreements and
investigate:
• The respective expiry/ maturity dates;
• The provisions for renewal of contract;
• Amount of service charges and the period of
payment;
• Escalation clauses; and
• Any other significant terms.
Select sample of purchases during the year and ensure
following:
- Purchase Requisition (PR) raised by relevant
department
-Minimum quoatations are obtained as per best
practices and Company's SOP
- Price comparison list is attached
- Review date of purchase order and ensure PO
contains list of items for which quotations are
obtained
- Match details of invoice with the GRN, PO and PR
in order to identify any anomaly with respect to
amount, date, quantity and type.
Ensure that quality inspection is performed at the time of
receiving of stock/material and any claim for
faulty/substandard/mismatched or unsuitable items is
immediately rasied with supplier.
Ethical/Unethical N/A
Risk and Control sheet Excel sheet state risk identified as per debriefing and
(Prepare three column excel sheet - additional cum potential risk identify during audit and
RISK, CONTROLS, state controls available ( inquire from management)
COMMENTS) to mitigate risk and comment (by you) on their
effectiveness including if controls are not available
how managemnet ensure risk mitigate.
Supplier Evaluation
Compliance with SOP
- Obtain SOP of the company for the supplier
evaluation.
- Inquire as to how the quality control function is
carried out when a new supplier's products are
received.
Analysis Obtain market analysis of how price level is being
monitored.
Supplier Evaluation
TOC Obtain a list of registered and approved suppliers and
ensure that the goods purchased are from registered
and approved suppliers only.
Ensure that the list of approved suppliers have been
approved from the relevant authorities.
Inquire the procedure for supplier performance
evaluation.
Ethical/Unethical
comment how management evaluate all production
function is performed in business ethical manner.
