What are Purchases?
Purchases are the acquisition of goods or services for personal or business use. In a business context, purchases are transactions in which a company acquires goods or services from another company or individual in order to produce or resell the goods or services. Purchases are typically made with the intention of generating revenue by selling goods or services at a profit. In personal terms, purchases are transactions in which an individual acquires goods or services for their own use or consumption. Purchases may be made with cash, credit, or other forms of payment.
Audit of Purchases
An audit of purchases is a review of a company’s purchasing records to ensure the accuracy and completeness of the reported figures. This type of audit is typically performed by an independent auditor. He/she will review the company’s purchasing transactions, contracts, invoices, and other relevant documents. This is to verify that the purchases have been accurately recorded and reported. The audit may also include testing of internal controls over the purchasing process. For example, verifying that the company has adequate policies and procedures in place to prevent errors and fraud. The goal of an audit of purchases is to provide assurance that the company’s financial statements accurately reflect its purchasing activity.