What are the Audit Recommendations can you provide based on the cases below? Provide at least 4 audit recommendations and its explanations.
X Corporation DATE June 28, 2021 TO : Mr.K.L. Treasurer FROM : Intemal Audit Department RE : Inspection of Accounts Payable Voucher, Check Voucher and related attachments GENERAL In planning and performing our audit in accordance with Philippine Standards on Auditing, we considered the internal controls of the Accounting Department (the Department) as a basis for designing our auditing procedures for the purpose of testing the effectiveness of the Department's internal control. We are issuing this report in line with our responsibility to evaluate the adequacy and improve the efficiency and effectiveness of internal controls. We obtained an understanding of the policies and procedures of the Department Our procedure includes examination and inspection of supporting documents. The result of our test of controls allows us to evaluate whether or not the controls identified over the flow of transactions are likely to be effective in preventing control deficiencies in the Department Our comments and recommendations are offered as constructive suggestions in support of management's continuing desire to improve internal controls and other financial and administrative practices and procedures and were limited only based on the provided supporting documents. OBJECTIVES The primary objective of this engagement is to help the Department achieve its objective by bringing in a systematic, disciplined approach to evaluate the adequacy and improve the efficiency and effectiveness of intemal controls. SCOPE OF ENGAGEMENT This engagement covers the Disbursement made for the months of January to May 2021. LIMITATIONS The Audit Risk or risk that an incorrect audit result/opinion is issued will not be fully mitigated, even if the audit team exercise due diligence and professional skepticism all throughout the engagement but can still be managed by applying the appropriate audit risk model. The audit risk is the product of Inherent Risk Control Risk and Detection Risk. The audit risk is directly correlated also with the supporting documents and information's completeness, accuracy and if provided timely by the process owners. AUDIT PROCEDURES PERFORMED We have performed the following audit procedures: 1. Obtained APV, CV and other related disbursement documents for the months of January to May 2021 2. Inspect if the amount in Invoice matched with the APV. 3. Inspect if the documents were signed by the authorized signatories. AUDIT FINDINGS During our inspection of the Payment Vouchers (PV) and Accounts Payable Vouchers (APV) together with all the documents related to disbursements for the months of January to May 2021, we have noted that some of the Payment Vouchers were not completely signed by the authorized signatories. Invoke Number Customer Amount RFP Amount APV PV Amount 00013061 PCSI 425,976.59 425,976.59 000017783 000016914 418,369.87 REMARKS APV not signed by the verifier APV not signed by the checker 1076 SMI 10,275.20 10,275.20 000017847 000017007 10,183.46 Accounting Audit Reply - 6.30.21 (Ms. K.L.) Upon review of the above, yes it is true that the verifier was not able to sign the Accounts Payable Vouchers (APVs), but it is good to note that the verifier had pink tickmarks on the docs, meaning to say that she really checked that the payments made are valid. Moving forward, we will ensure that the verifier signs on the APVs. Furthermore, upon checking the supporting documents attached, we noted that some were incomplete Invoice Number Customer Amount RFP Amount 0191 LMDC 18,000.00 17.678.57 APV Amount REMARKS REP no signature by 0000180180000171511967857 the preparer REP no signature by 000018017000017150 244,713.33 the preparer RFP with erasure 000017466 00001661713,974.11 without countersin 0186 LMDC 249,162.66 244,713.33 0108327 MC 14,100.00 14,100.00 1402 RSAS 185,624.96 185,624.96 000018594000017632 184,898.59 No 2307 attached Various (November) II 116,242.56 116,242.56 000018290000017456 Payee Name in APV 114,166.80 was PGMC Acti Go to Accounting Audit Reply - 6.30.21 (Ms. K.L) Accounting Audit Reply - 6.30.21 (Ms. K.L) Inv#s 0191 and 0186 LMDC - the RFP is being prepared by EO; Ms. J was not able to sign as the preparer but the RFP was signed by VP of Finance. Already informed Ms. J. to sign all RFPs that she prepares before forwarding to Accounting. Inv# 0108327 MC - RFP was dated December 22, 2020; APV was dated December 29, 2020 but the PV was dated January 12, 2021. Already informed OMPD to countersign any erasures in their RFPs, moving forward. Inv#1402 RSAS - No BIR 2307. Since the pandemic started instruction given regarding the release of suppliers' checks is: every Friday for release at B Building. We handed over to OMPD the release of suppliers' checks since Accounting cannot be physically present at B Building. RSAS collector must have inadvertently taken the file copy of BIR form 2307 and maybe the OMPD personnel releasing the check did not notice that the file copy of BIR 2307 is no longer in the set of documents (PV, APV, Invoice, etc.). We already reminded OMPD to check the set of documents being returned by the suppliers. Various - ICI - Payee name in PV is Y Corporation. The PV already edited (edited same day, but was not attached with the other documents since the check is already for signature of signatories) with the correct payee name: ICI. RECOMMENDATION
