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Assignment Scenario:

The Chief Financial Officer of your client is concerned that a member of the payable group is living

beyond his means and that the pattern of payments in this department does not correlate to that of

previous years. He has asked your audit team to perform a special review of the AP system to look for

any irregularities.

Purchase/payment fraud is one of the more common types of fraud in an organization. Many frauds in this

area involve the manipulation of the payment information — for example, the creation in the ledger of a

fictitious supplier, or reactivating a dormant account. Particularly vulnerable are miscellaneous accounts.

However, you must not overlook fraud perpetrated on a genuine supplier’s account with or without the

supplier’s collusion.

Many purchasing systems are complex with automatic re-ordering so that once a supplier has been set up

and a requisition input, payment will be processed automatically. Staff may also be in collusion with

suppliers to commit fraud by receiving gifts or kickbacks for additional business, by paying invoices on

more favorable terms than other suppliers, or as per the organization’s policy on payments. Also,

employees may exceed ordering and payment authorization levels by splitting invoices or payments

below authorization thresholds.

This assignment covers the types of tests one might perform when testing AP and looking for fraud, using

IDEA. The following auditing plan as a roadmap through this assignment:

Assignment

Item

IDEA Workbook

Exercises

General Description of Task

3 3A Open IDEA and create a Managed project for Accounts Payable.

4 – 6 3B – 3D Import and agree the Accounts Payable data.

a) Import the Accounts Payable transactions,

b) Import the Authorized Suppliers detail,

c) Compute field statistics,

d) Select a control total field for each database, and

e) Use Discover to identify trends within the data.

7 3E Analyze the profile of the number and value of payments by the numeric band

to identify any unusual trends and to extract high-value amounts.

8 3F Identify high and unusual amounts.

9 – 10 3G Identify further unusual payments from previous analyses, including:

a) "CASH" in Payee name,

b) Round sum amounts,

c) Payments authorized by HMV, and

d) Payments made on a Sunday.

11 3H Test for duplicate payments and vendors/payees.

12 3I Test for completeness by testing for gaps in the check number sequence.

Skipped 3J Identify working days on which no payments were processed.

13 3K Analyze payment terms and ensure that the client’s payment policy

has been followed.

14 3L Test the validity of payments to authorized suppliers.

15 3M Analyze payments per supplier to identify significant changes from the

previous year’s total.

Assignment 7: IDEA Assignment #2: Accounts Payable

2

Despite your success on the AR project, your audit manager, Michelle Gwen Smith (MGS for short),

knows that you are still pretty new to IDEA. As such, she has given you one of her old training

workbooks with detailed instructions on how to carry out the requirements of this assignment. She was

even kind enough to go through the workbook over the weekend and added a few notes that should help

you complete your assignment. However, she has also blocked out some information to ensure you can

draw your own conclusions.

1) Review the potential risks and their associated audit objectives associated with the Accounts

Payable cycle. In a few sentences (at least two, no more than four) describe in your own words

the primary risks that one faces when auditing and examining the Accountants Payable cycle.

2) Review the tests for which IDEA is well suited in the AP cycle, as well as the example data

request form for obtaining AP data from a client.

3) If you have not already done so, follow the instruction in section 3A of the IDEA workbook and

create a new managed project in IDEA for the AP work. Name the project and the answer sheet

you submit AP_2018_YourLastName_YourFirstName.

NOTE: Be sure that you have set-up the G Drive folder, and that you have linked IDEA to the

folder on the G Drive. Otherwise, you risk losing your work when you exit the virtual desktop.

Instructions for setting up the folders, and finding/changing the IDEA default save location are in

Blackboard.

4) Now that the AP project is created, you need to bring in the data from the client. To do that, work

through Exercises 3B and 3C. After completing the import of both files, take a screenshot for

audit documentation purposes. It needs to show both the record count per payments file, in “File

Explorer” window on the left, and the control total of AMOUNT per the payment files via the

“Properties” window on the right. I’ve included an example from another client below. Delete the

example, including the arrows and boxes, and replace it with the one from this client. As a check

figure, your record count should be 999, and the summed value of the AMOUNT should be

$34,145,300.89. If you have these figures, great job, keep going, if not something has gone wrong

and needs to be fixed before moving on with the assignment.

Assignment 7: IDEA Assignment #2: Accounts Payable

Assignment Scenario:

The Chief Financial Officer of your client is concerned that a member of the payable group is living beyond his means and that the pattern of payments in this department does not correlate to that of previous years. He has asked your audit team to perform a special review of the AP system to look for any irregularities.

Purchase/payment fraud is one of the more common types of fraud in an organization. Many frauds in this area involve the manipulation of the payment information — for example, the creation in the ledger of a fictitious supplier, or reactivating a dormant account. Particularly vulnerable are miscellaneous accounts. However, you must not overlook fraud perpetrated on a genuine supplier’s account with or without the supplier’s collusion.

Many purchasing systems are complex with automatic re-ordering so that once a supplier has been set up and a requisition input, payment will be processed automatically. Staff may also be in collusion with suppliers to commit fraud by receiving gifts or kickbacks for additional business, by paying invoices on more favorable terms than other suppliers, or as per the organization’s policy on payments. Also, employees may exceed ordering and payment authorization levels by splitting invoices or payments below authorization thresholds.

This assignment covers the types of tests one might perform when testing AP and looking for fraud, using IDEA. The following auditing plan as a roadmap through this assignment:

AssignmentItemIDEA Workbook ExercisesGeneral Description of Task
33AOpen IDEA and create a Managed project for Accounts Payable.
4 – 63B – 3DImport and agree the Accounts Payable data.a) Import the Accounts Payable transactions,b) Import the Authorized Suppliers detail,c) Compute field statistics,d) Select a control total field for each database, ande) Use Discover to identify trends within the data.
73EAnalyze the profile of the number and value of payments by the numeric band to identify any unusual trends and to extract high-value amounts.
83FIdentify high and unusual amounts.
9 – 103GIdentify further unusual payments from previous analyses, including:a) “CASH” in Payee name,b) Round sum amounts,c) Payments authorized by HMV, andd) Payments made on a Sunday.
113HTest for duplicate payments and vendors/payees.
123ITest for completeness by testing for gaps in the check number sequence.
Skipped3JIdentify working days on which no payments were processed.
133KAnalyze payment terms and ensure that the client’s payment policyhas been followed.
143LTest the validity of payments to authorized suppliers.
153MAnalyze payments per supplier to identify significant changes from theprevious year’s total.

Despite your success on the AR project, your audit manager, Michelle Gwen Smith (MGS for short), knows that you are still pretty new to IDEA. As such, she has given you one of her old training workbooks with detailed instructions on how to carry out the requirements of this assignment. She was even kind enough to go through the workbook over the weekend and added a few notes that should help you complete your assignment. However, she has also blocked out some information to ensure you can draw your own conclusions.

1) Review the potential risks and their associated audit objectives associated with the Accounts Payable cycle. In a few sentences (at least two, no more than four) describe in your own words the primary risks that one faces when auditing and examining the Accountants Payable cycle.

2) Review the tests for which IDEA is well suited in the AP cycle, as well as the example data request form for obtaining AP data from a client.

3) If you have not already done so, follow the instruction in section 3A of the IDEA workbook and create a new managed project in IDEA for the AP work. Name the project and the answer sheet you submit AP_2018_YourLastName_YourFirstName.

NOTE: Be sure that you have set-up the G Drive folder, and that you have linked IDEA to the folder on the G Drive. Otherwise, you risk losing your work when you exit the virtual desktop. Instructions for setting up the folders, and finding/changing the IDEA default save location are in Blackboard.

4) Now that the AP project is created, you need to bring in the data from the client. To do that, work through Exercises 3B and 3C. After completing the import of both files, take a screenshot for audit documentation purposes. It needs to show both the record count per payments file, in “File Explorer” window on the left, and the control total of AMOUNT per the payment files via the “Properties” window on the right. I’ve included an example from another client below. Delete the example, including the arrows and boxes, and replace it with the one from this client. As a check figure, your record count should be 999, and the summed value of the AMOUNT should be $34,145,300.89. If you have these figures, great job, keep going, if not something has gone wrong and needs to be fixed before moving on with the assignment.

5) Using field statistics, get to know the data better by completing the following items.

a) Fill in the earliest and latest date for each of the date fields.

FieldEarliest DateLatest DateMost Common Day
Inv_Date
Pay_Date

b) Using the values from the summary statistics you’ve computed, complete the below table.

Field# of Blanks# of Categories
Suppno
Payee
Invoice
Auth

c) Compare the spending files from this year and last year. (Hint: The supplier.txt data file contains the prior year total dollars spent per supplier)

Field20172018Difference% Difference
Net Value
Average Value
Minimum Value
Maximum Value
#of Record

Why does it make sense to compare the Net Value of 2018 to that of 2017, but not the Average Value, Maximum Value, and # of Records between the years, based on the files we’ve received?

6) We aren’t going to do much with the Dashboard in IDEA, but it is good to know what it can do. Follow the steps in exercise 3D. Maximize the chart “Accounts Payable: Count of records by Amount.” Take a screenshot of the chart, and place it in the space below, please crop or size it to be about the same size as the below example.

This is only an example of a chart from IDEA. Your graph will look different then this one. This example looks at payment date ranges, which is not what your graph will present.

7) Now let’s analyze the payment. Follow the steps in exercise 3E, and use the data to complete the engagement documentation by filling in the missing blanks below.

To assess the payment activity, we grouped the payment amounts into ___strata. The first ten are groups of _______ and the final two are groups of _______. The largest stratum by record percentage is stratum ___ with ____ % of the total records. The largest stratum by dollar amount is stratum ___, with _____ % of the total dollars.

Following the steps in 3E, to create a stratification result chart. Copy the chart to your clipboard as a bitmap file, and paste it below. I have included an example of a stratified line graph below. Please delete the example and replace it with your graph. You do not have to submit a line graph. Feel free to play with the options within IDEA, such as chart type, and palette to create a graph that you think best conveys the information to the reader. However, please include the point labels (i.e., the number of items at the top of each stratum).

This is only an example of a strafified line graph from IDEA. Your strafified graph will look different then this one. This example looks at payments based on the number of days outstanding, which is not what your graph will present.

Given the general trend in payments, does anything seem odd or worth further analysis based on the report?

8) Follow the steps in exercise 3F, to identify and extract high and unusual payments. Then follow the “Additional Steps for MGS” to create a pivot table to summarize the payment amount by the person that authorized the payment. As noted in the additional steps, send the pivot table to Excel, then copy and paste the pivot table from Excel into this file. (Hint, you can paste the pivot table as a picture if you like, as that might take up less space. However, if you do, be sure to do all the necessary formatting within Excel before copying and pasting it here as you can’t change the format of the numbers within a pasted picture.)

In one or two sentences, indicate what appears odd or unusual about the authorization’s based on the summary results presented by the pivot table.

9) In exercise 3G, you will perform four data extracts. Use the extracts you created to identify exceptional transactions to complete the below table. Add any comments that you think relevant.

Extraction File# of Records$ AmountComment
Cash in PAYEE name
Round Sum Amounts
Authorized by HMV
Sunday Payments

10) Complete workbook section 3.5 Applying Benford’s Law to Identify Exceptional Items, and then fill in the blanks within the below audit documentation.

Based on our identification of a large number of unusual and high payments, we performed a ___ digit Benford’s analysis of the payments file. We found that ___ of the nine digits occur in the first digit place more than expected, and ___ of the nine digits appear less than expected. Of those that occur more than expected, the digit ___ has the largest difference between expected and actual occurrences, occurring approximately _____ more times than expected. Of the digits occurring less than expected, the largest difference belongs to the digit ___, which occurs approximately ____ times less than expected.

Based on these results, we expanded our analysis by conducting a first two-digit Benford’s analysis. Based on graphical results, the largest outlier is ____, which prompted us to investigate the ___ transactions starting with these two digits. Of them, ___ are between $79,000 and $80,000, of which HMV authorized ___ of the transactions.

11a) We’ve been asked by the client to test for duplicate payments and records. Based on the outcome of exercise 3H, step 9, complete the below audit documentation.

There are ____ duplicate records, which include: ___ payment totaling $________ to supplier _____ and ___ payments totaling $_______ to supplier ______.

11b) Next, test for supplier numbers with multiple payee names. Remember that the client told us that each supplier number should only have one name. What do the results indicate?

12) While examining the Bank Reconciliation, a member of the audit team noticed that not all the checks issued appear in the AP system. Test for missing check numbers in the sequence by using gap detection and complete the below sentence.

There are ___ gaps in the check sequence and ___ missing checks.

13) We’ve been asked to analyze payment terms and ensure that the AP group is following the client’s payment policy. Follow the steps in exercise 3K to answer the below questions.

Please fill in the following audit documentation based on your findings from the payments made outside the payment policy range.

We note that there ____ payments totaling $_______________ or _______% of total payments, which occur outside of the client’s payment policy range. Of these, ____ payments are early, (before 25 days) and ____ payments are late (delayed more than 35 days).

The company’s policy is to pay all suppliers within 25 – 35 days of receipt of the invoice. Are the employees following the policy? Please provide two pieces of evidence based on the field statistics that support your answer.

14) The CFO suspects that someone is making payments to unauthorized suppliers. Follow the steps in exercise 3L to answer the below questions.

a) Based on the History file, how many unmatched primary records are there?

b) Compute the total prior year payments control total per the joined database and complete the below chart to determine if the control total agrees to the original control provided by the client.

FieldPY Control Total per ClientPY Control Total per DatasetDifference
TOT_PREV_YR30,202,660.57

To which supplier number are two supplier names assigned?

c) Now let’s look for Payments to Unauthorized Suppliers. These are any payments made to a company that is not on the authorized supplier list. To do this test, we can look for payments that have a blank in the SUPPNO1 field of the Supplier Verification database.

Per the “Payments to Unauthorized Suppliers” extract, the client made one payment, of $16,318.97 to a supplier with a blank SUPPNO. The client made the remaining ___ payments, totaling $_____________, to supplier number ______.

15) Using the “Supplier Verification” database, summarize (or total) the AMOUNT field for each Supplier (i.e., SUPPNO). Then identify suppliers where the total payments this year have either increased or decreased by over 25%. Create an editable field to mark which suppliers will receive the additional investigation and add a comments field.

What is the control total of payments this year to the 14 suppliers whose turnover if more than 25% different than the previous year?

16) The audit partner needs to report the findings of the investigation to the client. To help with, first, fill in the blanks in the below paragraph with the appropriate information. Then provide a short conclusion, (at least two or more than four sentences) summarizing your thoughts on how the AP cycle is operating, and if the client’s controls are working.

Our analysis of payment activity has identified by the following items, which might be unusual or require additional investigation by management. There is a significant number of payments items just below the ______ threshold. There are ____ payments made to payees with CASH in the name. Employee, HMV has authorized _____ payments, with a total dollar value of over ____________. Many of the payments are above HMV’s authorization limit of $20,000. There are ___ missing checks. Employees ________ following the company’s payment policy, as the company made ___ payments within 25 days of the invoice date, which is quicker than the company policy, and __ payments more than 35 days after the invoice date, which is slower than the company policy. Even more unusual, the company made __ payments before entering the corresponding invoices into the AP system. Additionally, the company made payments to a supplier, not on the authorized supplier list, and issued the same supplier number to multiple suppliers.

In conclusion,

2

Assignment 7: IDEA Assignment #2: Accounts Payable

Assignment Scenario:

The Chief Financial Officer of your client is concerned that a member of the payable group is living beyond his means and that the pattern of payments in this department does not correlate to that of previous years. He has asked your audit team to perform a special review of the AP system to look for any irregularities.

Purchase/payment fraud is one of the more common types of fraud in an organization. Many frauds in this area involve the manipulation of the payment information — for example, the creation in the ledger of a fictitious supplier, or reactivating a dormant account. Particularly vulnerable are miscellaneous accounts. However, you must not overlook fraud perpetrated on a genuine supplier’s account with or without the supplier’s collusion.

Many purchasing systems are complex with automatic re-ordering so that once a supplier has been set up and a requisition input, payment will be processed automatically. Staff may also be in collusion with suppliers to commit fraud by receiving gifts or kickbacks for additional business, by paying invoices on more favorable terms than other suppliers, or as per the organization’s policy on payments. Also, employees may exceed ordering and payment authorization levels by splitting invoices or payments below authorization thresholds.

This assignment covers the types of tests one might perform when testing AP and looking for fraud, using IDEA. The following auditing plan as a roadmap through this assignment:

AssignmentItemIDEA Workbook ExercisesGeneral Description of Task
33AOpen IDEA and create a Managed project for Accounts Payable.
4 – 63B – 3DImport and agree the Accounts Payable data.a) Import the Accounts Payable transactions,b) Import the Authorized Suppliers detail,c) Compute field statistics,d) Select a control total field for each database, ande) Use Discover to identify trends within the data.
73EAnalyze the profile of the number and value of payments by the numeric band to identify any unusual trends and to extract high-value amounts.
83FIdentify high and unusual amounts.
9 – 103GIdentify further unusual payments from previous analyses, including:a) “CASH” in Payee name,b) Round sum amounts,c) Payments authorized by HMV, andd) Payments made on a Sunday.
113HTest for duplicate payments and vendors/payees.
123ITest for completeness by testing for gaps in the check number sequence.
Skipped3JIdentify working days on which no payments were processed.
133KAnalyze payment terms and ensure that the client’s payment policyhas been followed.
143LTest the validity of payments to authorized suppliers.
153MAnalyze payments per supplier to identify significant changes from theprevious year’s total.

Despite your success on the AR project, your audit manager, Michelle Gwen Smith (MGS for short), knows that you are still pretty new to IDEA. As such, she has given you one of her old training workbooks with detailed instructions on how to carry out the requirements of this assignment. She was even kind enough to go through the workbook over the weekend and added a few notes that should help you complete your assignment. However, she has also blocked out some information to ensure you can draw your own conclusions.

1) Review the potential risks and their associated audit objectives associated with the Accounts Payable cycle. In a few sentences (at least two, no more than four) describe in your own words the primary risks that one faces when auditing and examining the Accountants Payable cycle.

2) Review the tests for which IDEA is well suited in the AP cycle, as well as the example data request form for obtaining AP data from a client.

3) If you have not already done so, follow the instruction in section 3A of the IDEA workbook and create a new managed project in IDEA for the AP work. Name the project and the answer sheet you submit AP_2018_YourLastName_YourFirstName.

NOTE: Be sure that you have set-up the G Drive folder, and that you have linked IDEA to the folder on the G Drive. Otherwise, you risk losing your work when you exit the virtual desktop. Instructions for setting up the folders, and finding/changing the IDEA default save location are in Blackboard.

4) Now that the AP project is created, you need to bring in the data from the client. To do that, work through Exercises 3B and 3C. After completing the import of both files, take a screenshot for audit documentation purposes. It needs to show both the record count per payments file, in “File Explorer” window on the left, and the control total of AMOUNT per the payment files via the “Properties” window on the right. I’ve included an example from another client below. Delete the example, including the arrows and boxes, and replace it with the one from this client. As a check figure, your record count should be 999, and the summed value of the AMOUNT should be $34,145,300.89. If you have these figures, great job, keep going, if not something has gone wrong and needs to be fixed before moving on with the assignment.

5) Using field statistics, get to know the data better by completing the following items.

a) Fill in the earliest and latest date for each of the date fields.

FieldEarliest DateLatest DateMost Common Day
Inv_Date
Pay_Date

b) Using the values from the summary statistics you’ve computed, complete the below table.

Field# of Blanks# of Categories
Suppno
Payee
Invoice
Auth

c) Compare the spending files from this year and last year. (Hint: The supplier.txt data file contains the prior year total dollars spent per supplier)

Field20172018Difference% Difference
Net Value
Average Value
Minimum Value
Maximum Value
#of Record

Why does it make sense to compare the Net Value of 2018 to that of 2017, but not the Average Value, Maximum Value, and # of Records between the years, based on the files we’ve received?

6) We aren’t going to do much with the Dashboard in IDEA, but it is good to know what it can do. Follow the steps in exercise 3D. Maximize the chart “Accounts Payable: Count of records by Amount.” Take a screenshot of the chart, and place it in the space below, please crop or size it to be about the same size as the below example.

This is only an example of a chart from IDEA. Your graph will look different then this one. This example looks at payment date ranges, which is not what your graph will present.

7) Now let’s analyze the payment. Follow the steps in exercise 3E, and use the data to complete the engagement documentation by filling in the missing blanks below.

To assess the payment activity, we grouped the payment amounts into ___strata. The first ten are groups of _______ and the final two are groups of _______. The largest stratum by record percentage is stratum ___ with ____ % of the total records. The largest stratum by dollar amount is stratum ___, with _____ % of the total dollars.

Following the steps in 3E, to create a stratification result chart. Copy the chart to your clipboard as a bitmap file, and paste it below. I have included an example of a stratified line graph below. Please delete the example and replace it with your graph. You do not have to submit a line graph. Feel free to play with the options within IDEA, such as chart type, and palette to create a graph that you think best conveys the information to the reader. However, please include the point labels (i.e., the number of items at the top of each stratum).

This is only an example of a strafified line graph from IDEA. Your strafified graph will look different then this one. This example looks at payments based on the number of days outstanding, which is not what your graph will present.

Given the general trend in payments, does anything seem odd or worth further analysis based on the report?

8) Follow the steps in exercise 3F, to identify and extract high and unusual payments. Then follow the “Additional Steps for MGS” to create a pivot table to summarize the payment amount by the person that authorized the payment. As noted in the additional steps, send the pivot table to Excel, then copy and paste the pivot table from Excel into this file. (Hint, you can paste the pivot table as a picture if you like, as that might take up less space. However, if you do, be sure to do all the necessary formatting within Excel before copying and pasting it here as you can’t change the format of the numbers within a pasted picture.)

In one or two sentences, indicate what appears odd or unusual about the authorization’s based on the summary results presented by the pivot table.

9) In exercise 3G, you will perform four data extracts. Use the extracts you created to identify exceptional transactions to complete the below table. Add any comments that you think relevant.

Extraction File# of Records$ AmountComment
Cash in PAYEE name
Round Sum Amounts
Authorized by HMV
Sunday Payments

10) Complete workbook section 3.5 Applying Benford’s Law to Identify Exceptional Items, and then fill in the blanks within the below audit documentation.

Based on our identification of a large number of unusual and high payments, we performed a ___ digit Benford’s analysis of the payments file. We found that ___ of the nine digits occur in the first digit place more than expected, and ___ of the nine digits appear less than expected. Of those that occur more than expected, the digit ___ has the largest difference between expected and actual occurrences, occurring approximately _____ more times than expected. Of the digits occurring less than expected, the largest difference belongs to the digit ___, which occurs approximately ____ times less than expected.

Based on these results, we expanded our analysis by conducting a first two-digit Benford’s analysis. Based on graphical results, the largest outlier is ____, which prompted us to investigate the ___ transactions starting with these two digits. Of them, ___ are between $79,000 and $80,000, of which HMV authorized ___ of the transactions.

11a) We’ve been asked by the client to test for duplicate payments and records. Based on the outcome of exercise 3H, step 9, complete the below audit documentation.

There are ____ duplicate records, which include: ___ payment totaling $________ to supplier _____ and ___ payments totaling $_______ to supplier ______.

11b) Next, test for supplier numbers with multiple payee names. Remember that the client told us that each supplier number should only have one name. What do the results indicate?

12) While examining the Bank Reconciliation, a member of the audit team noticed that not all the checks issued appear in the AP system. Test for missing check numbers in the sequence by using gap detection and complete the below sentence.

There are ___ gaps in the check sequence and ___ missing checks.

13) We’ve been asked to analyze payment terms and ensure that the AP group is following the client’s payment policy. Follow the steps in exercise 3K to answer the below questions.

Please fill in the following audit documentation based on your findings from the payments made outside the payment policy range.

We note that there ____ payments totaling $_______________ or _______% of total payments, which occur outside of the client’s payment policy range. Of these, ____ payments are early, (before 25 days) and ____ payments are late (delayed more than 35 days).

The company’s policy is to pay all suppliers within 25 – 35 days of receipt of the invoice. Are the employees following the policy? Please provide two pieces of evidence based on the field statistics that support your answer.

14) The CFO suspects that someone is making payments to unauthorized suppliers. Follow the steps in exercise 3L to answer the below questions.

a) Based on the History file, how many unmatched primary records are there?

b) Compute the total prior year payments control total per the joined database and complete the below chart to determine if the control total agrees to the original control provided by the client.

FieldPY Control Total per ClientPY Control Total per DatasetDifference
TOT_PREV_YR30,202,660.57

To which supplier number are two supplier names assigned?

c) Now let’s look for Payments to Unauthorized Suppliers. These are any payments made to a company that is not on the authorized supplier list. To do this test, we can look for payments that have a blank in the SUPPNO1 field of the Supplier Verification database.

Per the “Payments to Unauthorized Suppliers” extract, the client made one payment, of $16,318.97 to a supplier with a blank SUPPNO. The client made the remaining ___ payments, totaling $_____________, to supplier number ______.

15) Using the “Supplier Verification” database, summarize (or total) the AMOUNT field for each Supplier (i.e., SUPPNO). Then identify suppliers where the total payments this year have either increased or decreased by over 25%. Create an editable field to mark which suppliers will receive the additional investigation and add a comments field.

What is the control total of payments this year to the 14 suppliers whose turnover if more than 25% different than the previous year?

16) The audit partner needs to report the findings of the investigation to the client. To help with, first, fill in the blanks in the below paragraph with the appropriate information. Then provide a short conclusion, (at least two or more than four sentences) summarizing your thoughts on how the AP cycle is operating, and if the client’s controls are working.

Our analysis of payment activity has identified by the following items, which might be unusual or require additional investigation by management. There is a significant number of payments items just below the ______ threshold. There are ____ payments made to payees with CASH in the name. Employee, HMV has authorized _____ payments, with a total dollar value of over ____________. Many of the payments are above HMV’s authorization limit of $20,000. There are ___ missing checks. Employees ________ following the company’s payment policy, as the company made ___ payments within 25 days of the invoice date, which is quicker than the company policy, and __ payments more than 35 days after the invoice date, which is slower than the company policy. Even more unusual, the company made __ payments before entering the corresponding invoices into the AP system. Additionally, the company made payments to a supplier, not on the authorized supplier list, and issued the same supplier number to multiple suppliers.

In conclusion,

2

Address

SUPPNOSUPPNAMEADDRESS1ADDRESS2ADDRESS3ZIP_CODETOT_PREV_YR
A128Ivan Aker149 1 AVE.OTTAWAONTARIOK3P 3I0480343.99
B008Denise Bent43-191 67 AVE.OTTAWAONTARIOK8J 2S3437119.23
B010Carter Bout869 KENSIGNTON AVE.TORONTOONTARIOM6H 8D6556865.35
C202Cash Inc3124 TOWER ST.OTTAWAONTARIOP3Z 8J8926888.88
D014William Ditt151 MAGNUS AVE.OTTAWAONTARIOL2Q 0N7390600.00
D025Nellie Dunn957 QUEEN ST.OTTAWAONTARIOP2C 9G9674092.45
F123Wanda Farr599 23 E AVE.OTTAWAONTARIOP3V 4Z9234102.71
F128Fixes533 DOMINIC ST.OTTAWAONTARION0W 1L4690799.89
F130Farmer455 39 E AVE.OTTAWAONTARIOL1G 9B6704603.56
G010Polly Gunn141 58 ST.OTTAWAONTARION8C 3X50.00
G020P Green72-930 QUEEN ST.EDMONTONALBERTAT5J 7M1719875.68
H014Linda Hand140 11 AVE.OTTAWAONTARION4F 7Q2609855.94
H025Luke Hair19-956 MAIN ST.OTTAWAONTARIOK5V 3X1644588.82
K001O Kay Yahs635 59 AVE.OTTAWAONTARIOP0Z 5K7998678.23
M014Cary S Matic67 62 S AVE.OTTAWAONTARIOL0Y 5T3695843.17
M020Miles Long556 24 ST.TORONTOONTARIOM1T 7S4718320.63
M025A Meadow731 83 AVE.OTTAWAONTARIOP9H 4E81217309.35
M1231 Moore336 KING ST.OTTAWAONTARIOP0A 7B1490890.65
M128Gus Main45-333 12 S AVE.OTTAWAONTARION9W 1I7800678.87
M130Maurice Mynah332 RIVERSIDE DRIVEOTTAWAONTARIOL9V 6P4992725.50
N001Noah Lott26-216 89 AVE.OTTAWAONTARIOL2Q 7A3898954.20
N005K Non499 BASELINE RD.MONTREALQUEBECH2A 1Z6452722.94
P006Phillippa Pail770 87 E AVE.OTTAWAONTARIOK4P 5X9432765.99
P007Mandy Pumps605 FOUNTAIN ST.OTTAWAONTARION9M 6R5800765.76
P008Ern Payed57-53 GARDEN RD.OTTAWAONTARION2J 7W8741171.15
P009Philip Upp Garages6-745 MAIN ST.TORONTOONTARIOM1N 9F3834789.32
P010Ri Pent13 -786 RIVERSIDE DRIOTTAWAONTARIOK2D 6G4913856.71
R007A Raid170 60 S AVE.OTTAWAONTARIOP8Y 4L6392602.69
R008IM Right803 LILLICO AVE.OTTAWAONTARION1S 7A5473958.65
R010Ronnie Biggs506 CHAPEL ST.OTTAWAONTARIOL3P 9M4451188.84
R011Richmond124 QUEEN ST.OTTAWAONTARIOP7V 3W8587962.78
R020Round Table690 MAIN ST.OTTAWAONTARIOK0M 1U6689593.63
R025Ray989 BANK ST.OTTAWAONTARIOL3U 0Q5823889.61
T004Dick Tate954 27 AVE.OTTAWAONTARIOL1D 9W0878625.59
T005Honor Toze850 BRONSON AVE.VANCOUVERBCV9M 3R3455140.82
T006Pole Tacks592 34 E AVE.OTTAWAONTARIOKQ7 3G2506912.39
T007Chimps Teaparty56-63 87 S AVE.OTTAWAONTARIOK4J 9T5503117.04
T008Joyce Tick822 16 S AVE.OTTAWAONTARIOP6L 1Z3380542.95
T009Tim Table612 RIVERSIDE DRIVEOTTAWAONTARIOK2M 4E6469568.44
T010Truckstop80-337 FOUNTAIN ST.OTTAWAONTARIOL1P 0V5758325.88
W005Williams Inc45-915 47 AVE.OTTAWAONTARIONZ9 3V80.00
W007The Matt Cash Co1596 1 N AVE.OTTAWAONTARION8W 3P41397587.06
W007Witch Products543 28 ST.OTTAWAONTARIOL3W 0M5482264.46
W008Winchester40-229 89 W AVE.OTTAWAONTARIOL6C 7H4480763.89
W011Wong Way806 MAGNUS AVE.TORONTOONTARIOM1Q 8U5442704.45
W020Wite Wash824 WYNDALE CRES.OTTAWAONTARION3E 7B7603677.11
W025Will Scarlet910 BASELINE RD.OTTAWAONTARION2L 0T6465025.32
Z001Edward Zoff36-977 KING ST.TORONTOONTARIOM3A 8Z1900000.00

&APage &P

Address

SUPPNOSUPPNAMEADDRESS1ADDRESS2ADDRESS3ZIP_CODETOT_PREV_YR
A128Ivan Aker149 1 AVE.OTTAWAONTARIOK3P 3I0480343.99
B008Denise Bent43-191 67 AVE.OTTAWAONTARIOK8J 2S3437119.23
B010Carter Bout869 KENSIGNTON AVE.TORONTOONTARIOM6H 8D6556865.35
C202Cash Inc3124 TOWER ST.OTTAWAONTARIOP3Z 8J8926888.88
D014William Ditt151 MAGNUS AVE.OTTAWAONTARIOL2Q 0N7390600.00
D025Nellie Dunn957 QUEEN ST.OTTAWAONTARIOP2C 9G9674092.45
F123Wanda Farr599 23 E AVE.OTTAWAONTARIOP3V 4Z9234102.71
F128Fixes533 DOMINIC ST.OTTAWAONTARION0W 1L4690799.89
F130Farmer455 39 E AVE.OTTAWAONTARIOL1G 9B6704603.56
G010Polly Gunn141 58 ST.OTTAWAONTARION8C 3X50.00
G020P Green72-930 QUEEN ST.EDMONTONALBERTAT5J 7M1719875.68
H014Linda Hand140 11 AVE.OTTAWAONTARION4F 7Q2609855.94
H025Luke Hair19-956 MAIN ST.OTTAWAONTARIOK5V 3X1644588.82
K001O Kay Yahs635 59 AVE.OTTAWAONTARIOP0Z 5K7998678.23
M014Cary S Matic67 62 S AVE.OTTAWAONTARIOL0Y 5T3695843.17
M020Miles Long556 24 ST.TORONTOONTARIOM1T 7S4718320.63
M025A Meadow731 83 AVE.OTTAWAONTARIOP9H 4E81217309.35
M1231 Moore336 KING ST.OTTAWAONTARIOP0A 7B1490890.65
M128Gus Main45-333 12 S AVE.OTTAWAONTARION9W 1I7800678.87
M130Maurice Mynah332 RIVERSIDE DRIVEOTTAWAONTARIOL9V 6P4992725.50
N001Noah Lott26-216 89 AVE.OTTAWAONTARIOL2Q 7A3898954.20
N005K Non499 BASELINE RD.MONTREALQUEBECH2A 1Z6452722.94
P006Phillippa Pail770 87 E AVE.OTTAWAONTARIOK4P 5X9432765.99
P007Mandy Pumps605 FOUNTAIN ST.OTTAWAONTARION9M 6R5800765.76
P008Ern Payed57-53 GARDEN RD.OTTAWAONTARION2J 7W8741171.15
P009Philip Upp Garages6-745 MAIN ST.TORONTOONTARIOM1N 9F3834789.32
P010Ri Pent13 -786 RIVERSIDE DRIOTTAWAONTARIOK2D 6G4913856.71
R007A Raid170 60 S AVE.OTTAWAONTARIOP8Y 4L6392602.69
R008IM Right803 LILLICO AVE.OTTAWAONTARION1S 7A5473958.65
R010Ronnie Biggs506 CHAPEL ST.OTTAWAONTARIOL3P 9M4451188.84
R011Richmond124 QUEEN ST.OTTAWAONTARIOP7V 3W8587962.78
R020Round Table690 MAIN ST.OTTAWAONTARIOK0M 1U6689593.63
R025Ray989 BANK ST.OTTAWAONTARIOL3U 0Q5823889.61
T004Dick Tate954 27 AVE.OTTAWAONTARIOL1D 9W0878625.59
T005Honor Toze850 BRONSON AVE.VANCOUVERBCV9M 3R3455140.82
T006Pole Tacks592 34 E AVE.OTTAWAONTARIOKQ7 3G2506912.39
T007Chimps Teaparty56-63 87 S AVE.OTTAWAONTARIOK4J 9T5503117.04
T008Joyce Tick822 16 S AVE.OTTAWAONTARIOP6L 1Z3380542.95
T009Tim Table612 RIVERSIDE DRIVEOTTAWAONTARIOK2M 4E6469568.44
T010Truckstop80-337 FOUNTAIN ST.OTTAWAONTARIOL1P 0V5758325.88
W005Williams Inc45-915 47 AVE.OTTAWAONTARIONZ9 3V80.00
W007The Matt Cash Co1596 1 N AVE.OTTAWAONTARION8W 3P41397587.06
W007Witch Products543 28 ST.OTTAWAONTARIOL3W 0M5482264.46
W008Winchester40-229 89 W AVE.OTTAWAONTARIOL6C 7H4480763.89
W011Wong Way806 MAGNUS AVE.TORONTOONTARIOM1Q 8U5442704.45
W020Wite Wash824 WYNDALE CRES.OTTAWAONTARION3E 7B7603677.11
W025Will Scarlet910 BASELINE RD.OTTAWAONTARION2L 0T6465025.32
Z001Edward Zoff36-977 KING ST.TORONTOONTARIOM3A 8Z1900000.00

&APage &P