Trade Payables

Trade Payables Ledger Section Module Obtain a listing of account balances comprising the period-end trade payables ledger, including the following fields Account code the supplier account code/number (mandatory) Account name the supplier account name Account balance the period end balance on the account (mandatory) Credit limit the supplier accounts credit limit Sum the account balance column and ensure this reconciles to the purchase ledger control account balance(s) per the Trial Balance. Using the debit balances test, extract all accounts with a debit balance. Understand the reasons for these debit balances and whether they represent fraud or error, or are legitimate. If the total of debit balances is significant, ensure they have been included in Trade Receivables, rather than Trade Payables Using the over credit limit test, extract all accounts with balances greater than their credit limit. Understand whether these represent fraud or error Understand whether they indicate that the company is unable to pay its debts Using the over amount test, extract all accounts with a significant balance Reconcile the balance to a supplier statement to ensure that all debts have been captured correctly Using the rounded amounts test, extract balances rounded to 1,000, 10,000, 100,000, or 1,000,000 as appropriate considering materiality. Understand whether these are legitimate balances and do not represent fraud or error. Produce a column statistics report Review the report and ensure that the source data appears reasonable (i.e. no text entries in numeric columns, blanks in date columns, etc) Other Trade Payables Ledger Tests Using the specific comments tool, search for any known related parties. Ensure related party balances are appropriately disclosed. Using the specific comments tool, search for any unusual account names, such as employee names, suspense accounts, miscellaneous accounts etc. Understand whether these are legitimate balances and do not represent fraud or error. Using the Benford test tool, analyse the account balance column Review the results for any evidence of manual manipulation Using the 'MUS sampling' tool, extract a sample of Supplier accounts Reconcile the balance to a supplier statement to ensure that all debts have been captured correctly

Trade Payables Listing Section Module Obtain a listing of transactions comprising the period-end trade payables ledger, including the following fields Account code the customer account code/number (mandatory) Account name the customer account name Invoice reference the reference number for the invoice Invoice amount the value of the invoice (mandatory) Invoice date the date of the invoice Due date the date the invoice is due to be paid Posted by the name of the user who posted the invoice Posted time the time the invoice was posted Posted date the date the invoice was posted Purchase order number - the purchase order number relating to the invoice Transaction type the transaction type code Sum the invoice amount column and ensure this reconciles to the purchase ledger control account balance(s) per the Trial Balance. Using the aging test, age the report by Invoice date using Months for the aging bands and the period end date as the aging reference date. Understand whether there are invoices that are overdue which may not actually be payable (possibly invoices that have actually been paid, old incorrect invoice postings) Understand if overdue balances indicate the company is unable to pay its debts in a timely manner, either due to inadequate controls, processes or insufficient funds

Using the 'duplicates' test, look for duplicates in the invoice number column Understand whether duplicated invoice references represent fraud or error. Using the over amount test, extract all significant transactions Understand whether these have been posted in the ordinary course of business and do not represent fraud or error Using the 'debit transactions' test extract all transactions with a credit value Using the 'exception report' extract from the results all significant transactions. Understand whether these have been posted in the ordinary course of business and do not represent fraud or error Using the 'invoices without PO' test, extract all invoices that do not have a purchase order (no over value amount specified) Understand whether these instances represent inadequate purchase order controls Using the transactions posted on test, extract any transactions posted on a Saturday or Sunday. Understand whether these are legitimate transactions that have been posted in the ordinary course of business, and why they have been posted on non-working days.

Add the posted by field to the pivot table column area to understand who is posting transactions on non working days Using the transactions posted on specific dates test, extract any transactions posted on other nonworking days, such as public holidays. Understand whether these are legitimate transactions that have been posted in the ordinary course of business, and why they have been posted on non-working days.

Add the posted by field to the pivot table column area to understand who is posting transactions on non working days Using the transactions around a specific date test, extract all transactions posted in the day before and day after the period end. Select an appropriate sample from these using the 'random sample' or 'systematic sample' and agree the goods receipt date to a delivery note to ensure the year-end purchases cut-off is correct (this can be combined with inventory cut-off testing) Using the transactions posted at specific times test, extract all transactions posted out of expected working hours. Understand whether these are legitimate transactions that have been posted in the ordinary course of business, and why they have been posted outside normal working hours. Add the posted by field to the pivot table to understand who is posting transactions outside business hours Using the transactions by user test, produce a summary of transactions by user. Review the list of users for any that you would not expect to be posting to the purchase ledger. Understand whether these transactions are legitimate and do not represent fraud or error. Using the rounded transactions test, extract transactions rounded to 1,000, 10,000, 100,000, or 1,000,000 as appropriate considering materiality. Understand whether these are legitimate transactions and do not represent fraud or error. Using the column statistics test, produce a summary of the trade payables listing. Review the report and ensure that the source data appears reasonable (i.e. no text entries in numeric columns, blanks in date columns, etc) Other Trade Payables Listing Tests Obtain a listing of after-date credit notes, and use Join 2 Sheets to join this (by invoice number) to the year-end listing (matches only from both sheets). Understand whether these are legitimate transactions, and not the reversal of false purchases used to overstate inventory Ensure that payables accruals are reduced by the value of these after-date credit notes Using the Benford test tool, analyse the transaction value column Review the results for any evidence of manual manipulation Using a listing of transactions up to the current date, use the 'exception report test' to extract items where the transaction was posted after the period-end but the document date (invoice date) was before the period-end Understand whether these liabilities were recorded at the period-end in accruals Using the 'Join 2 sheets' tool join a current period summary of purchases by supplier code to one for the prior-year For any accounts where the level of purchases is significantly different, understand the reasons for this Using the 'gaps' tool, identify any missing sequential invoice, credit note or purchase order numbers Understand whether there is a legitimate reason for their absence Using the 'out of mask' tool, identify any invoice, credit note or purchase order numbers that do not fit the standard numbering format Understand whether these are legitimate and not the result of fraud or error

Other Trade Payables Tests Use the random sample tool to select controls test samples, such as the following For any new supplier accounts set up during the period, bank details have been provided on company letter-headed paper For any new supplier accounts set up during the period, the creation of the account has been authorised appropriately For any key monthly reconciliations, ensure they are being performed correctly and reviewed and reconciling amounts are being followed up appropriately.