LAKESIDE COMPANY

INVENTORY PURCHASES AND DISBURSEMENTS TRANSACTIONS

DECEMBER 31,1991
DATE

PAYEE

CHECK NO.

$ AMOUNT

1/4/91
2/3/91
4/1/91
4/18/91
5/22/91
6/18/91
7/25/91
8/4/91
9/13/91
10/20/91
11/15/91
12/23/91

Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products
Cypress Products

0961
1480
2322
2568
3113
3692
4230
4493
5020
5552
6009
6681

$ 12610.47
$
391.05
$
4210.40
$
6069.10
$
841.70
$
7018.45
$
2292.40
$
667.45
$
318.41
$ 15440.91
$
8661.70
$ 2098.78

AUDIT
PROCEDURES
/\ t
/\ t
A
/\ t
/\ t
/\ t
/\ t
A
/\ t
/\ t
/\ t
/\ t
/\ t
/\ t

Comments:
Prices on purchases of 4/1/91 and 7/25/91 do not agree with the Master Price list by $
200 and $360 respectively. According to Edward Thom as, the difference represents monthly
purchases from Cypress at different prices than shown in the current price list.
A

PASS FURTHER WORK

Purchase requisition docs do not agree with receiving report for one item. Thomas
indicated that replacement with a similar item was made because of stock-out.
B

PASS FURTHER WORK

Four requisitions were approved by Miller rather than Rogers .Thomas indicated that
only requisitions estimated to be over $ 1,000 must be approved by Rogers.
C

CHANGE SYSTEM FLOWCHART

PASS FURTHER WORK

AUDIT PROCEDURE:

B
C

C
C


Traced to purchase invoice. Noted agreement with amount of check and payment date.
Each disbursement is 3% less than the invoice amount, representing the cash discount. All
discounts were recalculated.
Compared invoice price with Master Price List. All agreed except

Examined purchase invoices for evidence that company employees verify prices,
extensions and footings. Markings or initial present in all cases.
Verified mathematical accuracy of extensions and footings of invoice.
/\

Examined cancelled check for amounts, dates, signature, endorsement and payee.

t
Examined receiving report for agreement with purchase as to description and quantity.
All reports were properly signed by either Thomas or Wisdon.
Examined purchase requisition for agreement with receiving report and invoice.
Verified account code. All requisitions were properly approved except

and

AUDIT OBJECTIVES:

To verify that all merchandise was properly ordered and received and is for legitimate business
purpose.
To verify that expense and assets are properly valued and classified. To verify that cash
disbursements are for legitimate commitments and properly recorded.

AUDIT CONCLUSION:

Purchases and Disbursements transactions are fairly stated per the books.

SCOPE:

(a) Population- All purchases from Cypress Products

(b) Sample- Judgmental ,Selected 12 disbursements for merchandise from Cypress from
Cash Disbursements Journal.

Prepared by:
Reviewed by:
Approved by:
Date: