ACC311 VU Current Assignment No. 2 fall Januray 2012

[Vuhelper]

1). Assessment of Records or Documents:

Assessment or Inspection of records or documents consists of examining records or documents whether internal or external, in paper form electronic form or other media.

Explanation:

This type of inspection provides evidence of unstable degree of reliability depending on their nature and source and in case of internal records and effectiveness of controls over their production.

Reason:

In this type of audit procedure auditor can inspect according to situation of the statement that the internal control of Star Technologies Limited (snow) consists of what type of record which is proved through the statements,

“Check the records of the department”

“Check the recording system properly”

“The purchases department receives the information in the shape of an e-mail containing the details about specifications”

“A copy of the order is also files in the purchase database by computerized system”

“Star Technologies keeps their records in proper computerized system”

“Stamps the delivery note with order number, which is then filed in store record”

[Vuhelper]

SOLUTION IDEA:

Question no.1 and Question no. 2 are attempted in this way so search the handouts Lecture no. 22 and Lecture no. 32 as well, for the solution of the questions.

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1). Assessment of Records or Documents:

Assessment or Inspection of records or documents consists of examining records or documents whether internal or external, in paper form electronic form or other media.

Explanation:

This type of inspection provides evidence of unstable degree of reliability depending on their nature and source and in case of internal records and effectiveness of controls over their production.

Reason:

In this type of audit procedure auditor can inspect according to situation of the statement that the internal control of Star Technologies Limited (snow) consists of what type of record which is proved through the statements,

“Check the records of the department”

“Check the recording system properly”

“The purchases department receives the information in the shape of an e-mail containing the details about specifications”

“A copy of the order is also files in the purchase database by computerized system”

“Star Technologies keeps their records in proper computerized system”

“Stamps the delivery note with order number, which is then filed in store record”

[Vuhelper]

01) Purchase Requisition

A purchase requisition is a request sent to the purchasing department to procure goods or services. For an audit point of view it should come though proper channel.

02) Purchase Order

A PO is a commercial document issued by a buyer to seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy products or services.

03) Receipt of Goods/Services

A receipt of goods is a document or an instrument which is given by the seller to respective receivers a valid legal paper which proves that goods have been delivered to the customer.

04) Vendor Invoice

Below are the requirements for vendor invoice



Your invoice number - please include your own invoice reference number to help avoid any confusion when tracking an invoice

Invoice date :- Date should be mentioned on the invoice.



Vendor ID number ;- as provided by RRD; your Vendor ID Number is a unique seven digit number assigned to you, and will appear on any Work Order (WO) for services requested by a Project Coordinator

GTS Work Order number;-, as provided to you by a Project Coordinator in a Work Order for the service requested. This number is unique for each assignment. The second element of the WO number is the GTS project number, which may help when referencing the assignment with your Project Coordinator. For example, WO number “1254-42457”

Service performed for GTS:- (translation, editing, proofreading, etc.)

Date of Consignment: – date of consignment should be on the invoice



Rate:- rate must be mentioned on invoice like (per-word, per-page or per-hour).



Total invoice amount mostly on invoices rate amount are on USD currency or local invoices country amount mentioned on it.



Consolidated invoices must include a line item breakdown for each consignment, and reference the WO number pertaining to each consignment.

Banking information applies ONLY to ACH/wire transfer payments.



05) Payment of Invoice

Approved invoices are imported into the Accounts Payable system daily. During approval and import the invoices pass through system validations. If the invoice is successfully imported, payment is issued and mailed to the vendor based on the vendor payment terms displayed in the vendor list of values.

• If the vendor’s payment terms are net cash or the check will be issued and mailed the next day.

• If vendor terms are other than net (snow) cash (e.g., net 30 days), the payment will be issued at a later point within the time period specified by the vendor terms. For example, a vendor with terms of net 30 will be paid within 30 days of the invoice date. Note that the invoice Status will display as Imported. (To determine if payment has been made, use Procurement Inquiry to see if a check number is displayed for the transaction.

For each purchase determine whether a LPO/requisition is sent to the Buyer (Head Office).

Check the completeness of the requisition. All fields should be completed e.g., authorized signature of the station accountant and not the requester, etc

Determine if the requisition meets the MRIP requirements as detailed in section of the procurement policy.

Check if the correct reference code is used.

Determine if requisitions are processed according to the FIFO principle.

Test the efficiency of the processing process i.e. from the time the requisition is received until the time the order is processed.

Determine that for each requisition a request for quotation is prepared and sent to at least four suppliers from the database in the Suppliers Management System.(all quotations should be requested and obtained by the buyer and not the requester).

Ensure that for each requisition; at least four quotations are received. If not check for approval of the Commercial Manager or his designated representative.

Determine if the lowest technically acceptable offer and which has scored the highest adjudication points was accepted.

Check for the following:

Date on requisition should be before that on the quotations and invoices, and Purchase orders are prepared after quotations are received.

Date on the invoices should be after that on the requisition, quotation and purchase order Determine if the receiving person signed the delivery note/invoice as evidence of checking items received. Determine if the function of authorization, ordering and receiving is adequately segregated.