You are the internal audit senior for Happy New Year Inc. and is responsible for conductin
You are the internal audit senior for Happy New Year Inc. and is responsible for conducting an
assurance engagement on the purchases procedures as requested by your Chief Internal Auditor as
part of the annual audit plan for the year 2018. The Company has a dedicated purchases manager
who has provided you with the following information:
? Staff need to specify how much and when they want the products or services delivered.
? Staff then write the purchase order or requisition order.
? Before the order can be placed, it usually requires some kind of authority for its purchase.
? At this stage in the purchasing cycle, the order is placed and this becomes a contract
between the business and the supplier.
? The goods are then delivered, checked in the warehouse and entered into the inventory.
Shortages and breakages are reported to the supplier for the appropriate credits to be
? Usually within 30 days, the invoices are received and paid.
? The purchasing ledger and stock records are updated. This is automatically done by a
purchasing computer system.