NAME OF AGENCY

AUDIT PROGRAM
FOR THE PERIOD ________________

ACCOUNTS PAYABLE
( Account Code 401 )

Account Description: This account is used to record indebtedness to contractors/

suppliers arising from the purchase of goods and services and other obligations in
connection with the agency’s operations/trade/ business.

Audit Objectives:

1. To determine whether all recorded and reported outstanding accounts payable as

of balance sheet date represent bona fide and legitimate claims of suppliers for
goods and/or services delivered during the period under audit

2. To ascertain that all amounts debited and credited to accounts payable during the
period under audit represent transactions and events which actually occurred
which either gave rise to, or reduced enforceable claims of suppliers against the
auditee

3. To ascertain that there are no bona fide transactions with suppliers during the
period under audit which have remained unrecorded as at balance sheet date.

4. To ascertain that all recorded purchase obligations have complied with all the
pertinent procurement and budgetary rules and regulations governing the
acquisition of goods and services.

5. To determine whether the outstanding balances of trade payables as at the end of

the period under audit are properly identified and classified in the balance sheet,
and that full disclosure of all significant/material information relative to the
account is made in the notes to the financial statements.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or

Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure
( PD )
 ASSERTIONFS
TIME
AUDIT FRAME
TO
WP
PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

1.1 Check whether the beginning balance C

of this account is the ending balance EO
in the immediately preceding period’s
audited Balance Sheet.

C
1.2 Check agreement of the balance of the
account as reported in the Balance
Sheet with the amount recorded in the
General Ledger for Accounts Payable.

1.3 Obtain aging schedule of all C

outstanding accounts payable and EO
determine whether there are balances VM
aged more than two years to
determine their validity or legitimacy
and to identify those that should be
reversed to the General Fund.

1.4 Using an appropriate sampling C

methodology, vouch to supporting EO
documents the recorded payables
(additions to the account) for goods
and or services delivered during the
period, as well as all payments/
deductions to the account during the
period under audit.

2.1 For sample transactions credited to C

account which were vouched or RO
substantiated using the approved VM
sampling methodology, physically
inspect or examine goods or services
delivered to ascertain not only their
actual delivery which gave rise to the
liability but also their compliance
with specifications which may affect
amount of the obligation recognized.
 ASSERTIONFS
TIME
AUDIT FRAME
TO
WP
PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

2.2 In case delivered items procured on C

credit were already consumed or EO
distributed to end users, check
issuance documents and
acknowledgement of end users. If
feasible, physically inspect items in
the custody of end users.

3.1 Obtain a schedule of outstanding trade C

payables as at the end of the period
under audit and check amounts in the
respective subsidiary ledgers to
ascertain accuracy of amount and
determine whether these are actually
unpaid per SL.

3.2 Check agreement of the total of said C

Schedule with the General Ledger EO
balance and determine if there are
discrepancies caused by unrecorded
payables or payments thereof during
the period.

3.3 Review payment transactions to C

suppliers made in the period RO
immediately prior to period under
audit, as well as those made
subsequent to balance sheet date, to
ascertain whether there were any
unrecorded liabilities.

3.4 Search for unrecorded payables by C

examination of open supplier’s
invoices/contractor’s statements
received to ascertain that they have
been recorded as accounts payable as
of balance sheet date.
 ASSERTIONFS
TIME
AUDIT FRAME
TO
WP
PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

3.5 Confirm the balance of selected C

payables by direct correspondence EO
with creditors particularly those with RO
significant balances, debit balances VM
and with small, and zero balances
with whom the agency has done
significant business/transactions.
Determine any unrecorded trade
payables.

3.6 Document and summarize unrecorded C

purchase obligations as well as
payments therefore.

4.1 While vouching or performing VR

substantive test of details of balances
to check on occurrence and validity
of all recorded payables,
simultaneously check on compliance
with applicable laws, rules and
regulations governing procurement of
goods and/or services.

4.2 Verify unpaid vouchers/claims and C

check whether those pertaining to the VR
audit period, except those covering
authorized obligations not covered by
allotments, are covered by OS.

4.3 Ensure that all purchase transactions VR

are duly approved by the proper
authority and are covered by the
appropriate funding/appropriation.

5.1 Determine whether there are payables VM

to trade creditors with debit balances PD
which sum or total is significant so as
to require separate disclosure in the
Balance Sheet.
 ASSERTIONFS
TIME
AUDIT FRAME
TO
WP
PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

5.2 Determine whether significant PD

items/matters pertaining to the
account are appropriately/adequately
disclosed in the Notes to Financial
Statements.

5.3 Take note of deficiencies, if any.

Prepare and issue AOM.

PREPARED BY : REVIEWED BY : APPROVED BY :

Date Date Date