Audit of Payables1 min read

What are Payables?

Payables are amounts of money that a person or company owes to suppliers, vendors, or other creditors for goods or services that have been received. In other words, payables are amounts that are due in the future as a result of transactions that have already taken place. These amounts may be due in the short term (usually within 30 days) or in the long term (more than 30 days). Companies typically keep track of their payables and other financial information using accounting software or other tools.

Audit of Payables

To audit payables, the auditor would review the company’s accounts payable records to ensure that they are accurate and complete. This would involve verifying that all vendor invoices have been recorded, that the amounts owed to vendors are accurate, and that the company has sufficient supporting documentation for the payables. The auditor may also test a sample of the payables to ensure that they have been properly classified and recorded in the company’s financial statements. Additionally, the auditor would review the company’s policies and procedures related to payables to ensure that they are in compliance with generally accepted accounting principles (GAAP) and the company’s internal policies.

Procedures/ Controls

  1. Trace receivable report
  2. Investigate reconciling items
  3. Test verification of invoices
  4. Match invoices to dispatch log
  5. Confirm receivable balance
  6. Review payment receipts
  7. Assess doubtful accounts
  8. Review credit/ debit notes
  9. Invoices and hold sales/ services/ revenue
  10. Sales/ services/ revenue return
  11. Related party receivables
  12. Trend Analysis