Audit Field Standards:
Audit of Purchasing and
Account Payables
Session 10
Learning Objectives
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Understanding Audit Field Standards of Audit of
Purchasing and Account Payables
Understanding Internal Control of Purchasing and
Account Payables
Understanding Audit Objectives of Purchasing and
Account Payables
Being able to design Audit Procedures of Purchasing
and Account Payables
Understanding of Documents (evidence) to support the
records of Purchasing and Account Payables
Audit Evidence of Purchasing and Account Payables
Confirmation about Account Payables
Some Frauds involving Purchasing and Account
Payables
Examples of Audit Findings of Purchasing and Account
Payables
The Internal Control Objectives of
Purchases and Account Payables
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Goods or services purchased are needed
Goods or services bought with a good price
Goods or services are bought from a qualified
supplier
Purchases are tighten in a clear agreement
Goods or services bought are received as needed
Goods or services bought are recorded and
classified properly
Purchases and Account Payables are paid in the
period of the company’s favor without getting any
pinalty
Activities Need to be Examined
Requesting of purchase activity
 Purchasing activity (the way of purchase)
 Receiving activity (The way of receive)
 Paying activity (The way of pay)
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Audit Procedures of Purchasing
and Account Payables
are the steps to be done sequentially to
achieve the audit objectives
Audit Objectives of Fixed Assets
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Transaction Audit Objectives
 Occurrence
 Completeness
 Accuracy
 Cut off
 Classification
Balance Audit Objectives
 Existence
 Completeness
 Right and Obligation
 Valuation and Allocation
Audit Objectives of Fixed Assets
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Disclosure Objectives
 Occurrence
 Right and Obligation
 Completeness
 Classification and Understandability
 Accuracy and Valuation
(Boynton, Modern Auditing 8 edition)
Documents (evidences) to support
the records of Purchasing and
Account Payables
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PR (Purchase Requisition)
PQ (Purchase for Quotation
Bid Evaluation
Contract or Agreement Letter
PO (Purchase Order)
RR (Receiving Report)
DO (Delivery Order of supplier)
Invoice of supplier
Purchase Return Document
Cash Receipt of Supplier
Audit Evidence of Purchasing and
Account Payables
Inquiries of the client
 Documentation
 Confirmation
 Observation
 Physical examination
 Analytical procedures
 Reperformance
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Confirmation about
Account Payables
Some Frauds in Purchasing and
Account Payable
Over or under stating the value of A/P
 Misclassifying Account Payables
 Not debiting A/P paid
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Examples of Audit Findings of
Purchasing and Account Payables
Condition
 Criteria
 Causes
 Effects
 Recommendation
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