Audit Procurement Process PDF

AUDIT PRACTICE & PROCEDURES II UNIT 2: AUDITING THE PROCRUEMENT PROCESS  PROCUREMENT Procurement is the process of purchasing for the business. A procurement audit will therefore concentrate on the systems of the purchasing department(s).  PROCUREMENT The internal a...

AUDIT PRACTICE & PROCEDURES II UNIT 2: AUDITING THE PROCRUEMENT PROCESS  PROCUREMENT Procurement is the process of purchasing for the business. A procurement audit will therefore concentrate on the systems of the purchasing department(s).  PROCUREMENT The internal auditor will be checking that the system achieves key objectives and that it operates according to company guidelines. Auditing is a business function that reviews internal processes or functions.  PROCUREMENT Internal audits provide information for business owners to ensure employees follow guidelines for their job. Owners may also find areas that need changes to improve or enhance business functions. Procurement is a function responsible for making major purchases or acquisitions for the company.  PROCUREMENT This function faces scrutiny because it involves spending the company’s capital. There are three classes of transactions included in the cycle:  1. Acquisitions of goods and services  2. Cash disbursements  3. Purchase returns and allowances and purchase discounts.  PROCUREMENT The acquisition and payment cycle involves the decisions and processes necessary for obtaining the goods and services for operating a business.  PROCUREMENT The cycle typically begins with the initiation of a purchase requisition by an authorized employee who needs the goods or services, and it ends with payment on accounts payable. PROCUREMENT  PROCUREMENT The cycle above shows a complete purchase cycle.  PROCUREMENT Control objectives, controls and tests of controls:- PROCUREMENT PROCUREMENT  TYPES OF AUDIT TESTS FOR THE ACQUISITION AND PAYMENT CYCLE