- This topic has 1 reply, 2 voices, and was last updated 11 years ago by
.
- Posts
SYSTEM AND CONTROLS
1) Why do both delivery notes and GRN have to be sequentally numbered.
2) If the purchase system has deficencies at the interim stage I.e GRNs being prepared without the aid of delivery notes, supplier recs not conducted regularly. How does this impact the planning of an audit.
3) Purchase cutt of- substantive procedures
AUDIT RISK
1) What’s the risk of ordering stock from abroad? I.e raw seafood, will there be inventory transalation problems?
2) Risk of the owners wife preparing the accounts? Will the be risk of fraud?
Trade payable – substantive procedures
SYSTEM AND CONTROLS
1) Why do both delivery notes and GRN have to be sequentally numbered.
1) Why do both delivery notes and GRN have to be sequentally numbered.
Sequential pre0-numbering allows completeness to be ensured and also permits easier tracing from document to document. If the sequential numbers are not used, there is little point to them.
2) If the purchase system has deficencies at the interim stage I.e GRNs being prepared without the aid of delivery notes, supplier recs not conducted regularly. How does this impact the planning of an audit.
Additional work will be needed on purchases and payables.
3) Purchase cutt of- substantive procedures
Make sure items recently received and in inventory are paid for or accrued for.
AUDIT RISK
1) What’s the risk of ordering stock from abroad? I.e raw seafood, will there be inventory transalation problems?
If it’s seafood, it might have deteriorated. Presumably it will be invoiced in the foreign currency, so translation will be needed.
2) Risk of the owners wife preparing the accounts? Will the be risk of fraud?
No worse than the owner preparing his own accounts. Perhaps she is not a trained accountant?
Trade payable – substantive procedures
Analytical procedures; reconcile with statements; payables circularisation; tracing entries on PL to invoices, GRNs and orders; tracing payments in cash book to DR of payables ledger.
- You must be logged in to reply to this topic.