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Purchases and Payments - Coggle Diagram

- - - - Quantity with GRN2
        
        Stock records from GRN
    - - Accounting Accuracy
        
        Test of Controls
        
        Select a sample of purchase invoices and:
        
        Agree quantity with GRN
        
        Price with Order/Price List; and
        
        Re-perform calculations.
        
        Select a sample of purchase invoices and follow through to the purchases journal inspect that it matches.
        
        Select a sample of GRN’s and agree to the entries in the stock records.
    - - Price with Price List
        
        Purchase Journal from Purchase Invoices
  - - - Test of controls
        
        Follow selected purchases through from the order and ensure correctly classified and recorded as inter-group or external purchases.
  - - - Prepare, GRN (Goods Received Note)
        
        Unmatched Invoices, Followed Up
        
        Numerically Recorded , missing numbers, followed up.
    - - GRN Matched with DN
        
        GRN matched with invoice
        
        Test of Controls
        
        Observe procedures i.r.o. receiving of goods. Confirm through observation that a quantity and quality check is performed.
        
        Select a sample of credit notes and – match to GRN and DN.
        
        Observe procedures to agree goods
        actually delivered to purchase orders.
        
        Inspect register of unmatched invoices.
        
        Enquire of the storeman and buyers if a requisition is made out at re-order level, and observe the procedures.
        
        Select a sample of GRN’s and match them to respective invoices and inpsect the entry in the purchase journal.
        
        Perform a sequence test on all requisitions, orders and GRN’s. Follow up missing numbers through enquiry with management.
    - - Goods Receiving Clerk, Inspect
        
        Short Deliveries, Credit Request
        
        Purchase Journal, Recorded
  - - - Reconciled
        
        Evidence of Review
    - - List of creditors
        
        By management
        
        Test Of Controls
        
        Test postings from the purchase journal to the purchase- and creditors control account in the general ledger. Inspect that the details match.
        
        Select a sample of creditors reconciliation:
        
        + Agree to supporting documents
        and records
        
        Inspect evidence of review by client
        
        Re-perform the mathematical accuracy
    - - Creditors control account Up to date
  - - - Authorised Purchase Manager
    - - Supporting Documentation Cancelled
    - - Test of Controls
        
        Select a sample of orders and match them to:
        
        requisition; and
        
        inspect for signature of buyer
        
        Select a sample of orders and inspect for the signature of the purchase manager as authorisation. Inspect that supporting documentation is cancelled.
  - - - Test of Controls
        
        Select a sample of GRN’s dated before and after year end. Match the GRN with invoices and follow through to the purchase journal. Inspect that the purchases are recorded in the correct accounting period
  - - - GRN (Goods Received Note)
    - - Invoices
    - - Delivery Note
        
        Creditor's Statement
        
        Test of Controls
        
        :star:Inspect:
        
        Always :star:select a sample first
        
        Anything that is on a piece of paper:
        
        PO, GRN, DN, Invoice and Statement from Supplier
- - - - Inadequate Tracking of Purchases
    - - Inaccurate Inventory Management
    - - Lack of Control Over Pricing
  - - - Lack of Management Review
  - - - Unrecorded Short Deliveries
        
        Potential Fraud and Irregularities
    - - Unmatched Invoices
    - - Inaccurate Purchase Journal
  - - - Inefficient decision-making
    - - Increased risk of fraud
  - - - Lack of authorization
    - - Increased Fraud Risk
  - - - Poor decision-making
    - - Audit and compliance issues
    - - Increased risk of fraud or errors
  - - - Poor Cash Flow Management
    - - Increased Risk of Errors and Irregularities
    - - Inadequate Inventory Management
        
        Audit and compliance issues
- - - - A senior official approves these requisitions.