Other Audit Procedures: Purchases and Other Expenses

Question 1

Inspect purchase invoices?

Answer 1

Inspect a sample of purchase invoices to ensure they agree to amount posted to general ledger

Question 2

Compare administrative expense investigated?

Answer 2

Compare expenses making up administrative expenses to prior year change and to expectations on a line by line basis. Where differences from expectations are discovered they should be investigated

Question 3

Enquire management unsettled claims?

Answer 3

Enquire of management whether there are any unsettled claims or obligations arising before year end and ensure they are provided for

Question 4

Recalculate accruals and prepayments?

Answer 4

Recalculate accruals and prepayments to gain evidence that other expenses are not over or understated

Question 5

Compare gross profit margin?

Answer 5

Compare gross profit margin with the previous year, the gross pargin per the budget and expectations. Investigate any unexpected fluctuations