AUDIT PROCEDURES FOR VERIFICATION OF J.Vs

ABC GROUP OF COMPANIES

AUDIT PROCEDURES FOR VERIFICATION OF J.Vs

v      PURCHASES ( Trims and Accessories, Packing Material etc.):	VERIFICATION PROCEDURES:
Supplier Invoices/Bills should be compared /verified with other supporting documents.  Supporting Documents:	General Criteria: ·         Authorization ·         Casting and dates ·         Supports
·         Purchase Orders	·         Authorized by Procurement Manager. ·         Approved by M.D ·         Invoice/Bill rate should not be exceeded then the P.O rates ·         As well as the Total amount should not be exceeded the P.O amount
·         Invoice/Bill	·         Compare the Bill QTY with D.Cs and GRNs as well as with the P.O ·         Compare the Rates with P.O rates ·         Total amount should not be exceeded the P.O amount (in case of thread 3% of the Total P.O amount can be accepted)
·         Delivery Challans	·         Receiving by stores department ·         P.O reference
·         Goods Receiving Notes ·         ERP Gate Receiving	·         Should be authorized ·         Should be prepared timely ·         Should include proper P.O #

v      IMPORT (Clearing & forwarding):	VERIFICATION PROCEDURES:
Bills of Imports (Clearing & Forwarding) (Eg. Asif Agencies) should be authorized by Export and Import Manager and the supporting documents should be verified (Compare the details of Supporting Documents with the Bill/Invoice).  Supporting Documents:	General Criteria: ·         Authorization (Import Manager) ·         Casting and dates ·         Supports
·         Goods Declaration	·         Invoice # and other details ·         Marks/Container #
·         Import Invoices	·         Compare Quantity of Goods and Amount with the Good Declaration
·         Import Gate passes	·         Compare dates and time vehicle & container # with the Bills
·         ERP Gate Receiving (if received at Zone)	·         Compare the details with the Import invoices, G.D, Gate pass, etc.
·         Cartage Bills (if any)	·         Verify the D.Cs and receiving of the goods and compare the Bill details with the Import gate passes, etc.

v      EXPORT (Clearing & forwarding):	VERIFICATION PROCEDURES:
Bills Export (Clearing & Forwarding) (eg. Asif Agencies) must be approved by Export Manager and the supporting documents should be verified (Compare the details of Supporting Documents with the Bill/Invoice).  Supporting Documents:	General Criteria: ·         Authorization (Export Manager) ·         Casting and dates ·         Supports
·         Goods Declaration	·         Invoice # and other details ·         Machine # / Shipping Bill #
·         Export Gate pass (KEPZ)	·         Invoice # and other details ·         Machine # / Shipping Bill # ·         Date & time ·         Vehicle # and Container #
·         ERP Gate Outgoing	·         Compare the details with the Export invoices, G.D, Gate pass, etc.
·         Wharfafe (Port Trust) Fees	·         Shipping Bill # ·         Quantity of Goods
·         Export sales Invoice	·         Invoice # and other details
·         Short Shipment Notes (if any.)	·         Quantity shipped
·         Cartage Bills (if any.)	·         Verify vehicle # and Container # with Export gate pass.

v      CARTAGE FOR EXPORT:	VERIFICATION PROCEDURES:
Export cartage Bills should be authorized by Export manager and proper reference to export invoice should be included on the Bills and should be verified from the supporting documents.  Supporting Documents:	General Criteria: ·         Authorization (Export  Manager) ·         Casting and dates ·         Supports
·         Loading Challans	·         Compare vehicle #, date and time on the Loading challan with the cartage Bill ·         Vehicle # ·         Dates and time
·         Export Gate Passes	Compare the following information with the Bill/Invoice: ·         Invoice # and other details ·         Machine # / Shipping Bill # ·         Date & time ·         Vehicle # and Container #
·         Export Invoice	·         Compare the details

v      IMPORT CARTAGE:	VERIFICATION PROCEDURES:
Import cartage Bills should be authorized by Import manager and proper reference to Import invoice should be included on the Bills and should be verified from the supporting documents.  Supporting Documents:	General Criteria: ·         Authorization (Import Manager) ·         Casting and dates ·         Supports
·         Import Gate Passes	Compare the following information with the Bill/Invoice: ·         Invoice # and other details ·         Machine # / Shipping Bill # ·         Date & time ·         Vehicle # and Container #
·         Delivery Challan	·         Receiving and P.O references, etc.
·         Import Invoices	·         Compare Invoice details with the Bill (Quantity, dates, etc.)

v      C.M.T/E.P.D CHARGES:	VERIFICATION PROCEDURES:
C.M.T Bills should be authorized by the relevant signatories and supporting documents should be attached with the Bills. Supporting Documents:	General Criteria: ·         Authorization ( G.M,  CMT Co-coordinator,) ·         Casting and dates ·         Supports
·         Work Order/EPD Rate sheet	·         Should be approved by M.D / G.M factory ·         Stitching Rates, Over Head rates, and rate of additional work should be verified with the Bill/Invoice and ·         Style and order details
·         Goods Receiving Notes (GRNs) ·	·         Verify the Quantity, Style, Work performed etc. ·         Dates and time ·         Authorization
·         ERP Gate Receiving	·         Verify the Quantity and description of garments etc.
·         Delivery challans and Gate passes	·         Verify the Quantity from D.Cs and Gate passes and check the CMT personnel receiving and inspections comments (if any.)
·         Cutting Sheets (prepared by Internal Cutting dept.)	·         Verify the Quantity sent to CMT Contractor with received Quantity and inquire the discrepancies (if any)

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Auditing Payroll of an organization where huge employees works (e.g. more than 3,000)

Auditing payroll is very complicated in an organization where huge employees are working e.g. more than 3,000 employees.
it's time wasting to re-calculating the salary amounts so we will have to perform the audit procedures and test of controls to have reasonable assurance regarding the payroll amounts/salaries.
There are some steps I use to follow while auditing the payroll, these are as follows:
1) Over time:
Extract the overtime reports and Perform Test of controls on overtime recorded in the payroll, verify that all over time is approved by the appropriate manager etc.


2) Additions / New employees hired:
Verify the additions to the payroll (new employees hired during the month), new hiring should be approved as per company policies.
The pay scale or basis salaries should be verified that these are according to approval or company policy.


3) Deletions / Employees left during the month:
Check that the employee left the job during the period have been properly removed from the payroll so that there salaries could not be processed as they are no longer employees of the company.

4) Increments, Promotions / demotions during the month:
Calculate the increase or decrease in the pay scale (salaries) of the employees, check the approval for the change in pay scale of the employees during the month, there might be batch increments processed each month for the selected employees e.g. employee who joined the company in the month of February will be provided an increment in the month of February each year.
Batch increments will avoid a huge increase in the payroll amount at a time the cost is split over the period.
an analytical review can be performed over the increments processed and also it can be reconciled by adding the changes to the opening pay scale (total payroll) e.g.
Total opening pay scale   (last month)
add: Additions / new employees hired during the month
Less: Deletions / employees left or terminated during the month
Add: Increments processed / increase in the salaries of the employees (Net of demotions)
Add/(Less): other changes in the pay scales of the employees e.g. in many company direct labor or supervisors are being paid on piece rate system or performance based pay so their pay scale will not be the consistent it varies month to month.

Closing pay scale as per Audit working 
Closing pay scale as per payroll processed
Difference                        

If difference is material then it should be investigated and ignored if it is immaterial.

5) Loans to employees:
Verify the additions (the employees who have been paid the loan during the month) with the approval or according to the company policies.
Verify the deletions (employee whose loans have been removed from the payroll, verify their settlements etc.
Check that loan deductions are according to standard deduction or according to loan repayment schedule etc.
check ledger entries are properly made in the relevant loans subsidiary ledger accounts.

6) Advances to employees:
Check that all advances have been deducted from the salaries of the employees who were paid the advances during the month.

7) Fuel / Conveyance Allowances:
Calculate the additions during the month in the payroll for Fuel or conveyance allowance and verify the approvals.

Prepare analytical review report for over all payroll, e.g. comparison between the last month and current month's payroll figures in depth etc. 

There might be any other content in the payroll depending the company's payroll structure e.g. Incentive paid to employee etc.
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