Type of Business :

Form of Business :
Organization :
Situs Operation :
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Content:
PsychoKath Corporation
Manufacturing of knives and other type of blades
Corporation
Year 2007
Philippines
Shirley Olivo
Kathleen Joy M. Santiago
2014
Audit of Purchasing Department
Audit of Warehouse
Audit of Sales Department
Audit of Purchasing Department
PsychoKath Company
For the month of October 2014
6. Upon issuing payment, Cash disbursement shall generate a Cash Disbursement Report.
Audit of Purchasing Department
For the month of October 2014
PROCESS OBJECTIVES
To manage working capital requirements / to manage funds
RISKS
Double payment
Payment to unauthorized vendors
Processing and subsequent payment of unathorized purchase request
POLICIES
1. Requesting department should prepare purchase requests and obtain appropriate approval based on
established Corporate Approval Matrix.
2. Upon receipt of PR from requesting department, Procurement should generate PO based on
approved Vendor Master File.
3. Procurement specialists should prepare the PO indicating the supplier and the amount of purchase.
The Purchasing Manager should review the prepared PO.
4. The receiving department should prepare a request for payment of the goods received based on the
supplier's invoice with reference to the PR made by the requesting department. The request for
payment should be validated by the Procurement department.
5. The Procurement department should coordinate to Cash Disbursement all transactions regarding
payment. The Procurement should validate the prices and the payment status before endorsing the
request for payment to Cash Disbursement.
6. Upon issuing payment, Cash disbursement shall generate a Cash Disbursement Report.
7. Procurement department shall update the payment status of paid PO based on Cash Disbursement
Report.
Audit of Purchasing Department
PsychoKath Company
For the month of October 2014
Audit of Purchasing Department
PsychoKath Company
For the month of October 2014
AUDIT PROCEDURE
1. Obtain 10 random samples of Purchase Request.
2. Obtain 10 random samples of Purchase Orders
3. Obtain list of approved suppliers from approved Vendor Master File
4. Obtain Cash Disbursement Report
5. Examine Purchase Request for proper approval
6. Confirm if suppliers indicated in the PO are included in the approved Vendor Master File
7. Match Cash Disbursement Report with PO file
Audit of Purchasing Department
PsychoKath Company
For the month of October 2014
Approved Supplier
Gluttony Co.
Envy Co.
Greed Co.
Pride Co.
Sloth Co.
Requisition no. Approved by: P.O. No. Supplier
71101 Mr. Charlie Mcdonnelle 89001 Wrath Co.
71102 Ms. Ava Kavanagh 89002 Gluttony
Co.
71103 Mr. Jacob Farrell 89003 Lust Co.
71104 Ms. Ruby Toole 89004 Envy Co.
71105 Mr. Jack Jones 89005 Greed Co.
71106 Ms. Sophie Kinsella 89006 Pride Co.
71107 Mr. Jacob Farrell 89007 Lust Co.
71109 Mr. Charlie Mcdonnelle 89009 Sloth Co.
89006 Pride Co.
Summary of findings
1. 3 Purchase to Unauthorized Vendor
2. 1 P.O. not closed
3. 1 Double payment made
4. 1 Improper Approval
5. 1 Lost of documents
Purchase Request (P.O.)
Purchase Order
(P.O.)
Cash Disbursement
Report
Paid(P)
P closed
(Unauthorized Vendor) Purchase and payment to unauthorized
vendor
P closed
(Double payment) P. O. not closed. Correction has been made
by the accouting dept.
(Unauthorized Vendors) (interview) Not properly reviewed by
the purchasing manager
P closed
(Unauthorized P. R.) (Interview) Ms. Ruby Toole is not part of
the Corporate Approval Matrix
None
P open
Risk of double payment
(Unauthorized Vendors) Procurement Department used and
outdated Vendor Master File in making Purchase Order
P closed
(Unauthorized P. R.) Unrecorded and unapproved payment
made. (Numerical Sequencing) Lost of PR and PO Doc.
None
P closed
Double Payment of P.O. no. 89006.Procurement Department
overlooked P.O. no. 89006 and did not update P.O. File
P.O. file Findings
Audit of Warehouse
PsychoKath Company
For the month of October 2014
6. Roofs, walls, floors, and ceilings should be free from cracks and other major damages.
PROCESS OBJECTIVES
To ensure that the inventories are in good conditions.
To ensure safety and security of warehouse personnel.
RISKS
Damaged/stolen inventories
Safety Hazards
POLICIES
1. All warehouse personnel should be properly trained on all warehousing and safety procedures.
2. There must be a safety evacuation plan.
3. Safety gears should be worn while inside the warehouse premises.
4. Firefighting equipment and early warning devices should be clearly and easily identified inside the
5. All entry and exit points should be secured from unauthorized access.
13. Security guards should check for Gate passes for all outgoing goods.
7. Temparature should be maintained at not more than 33 degrees Celsius.
8. Racks should be at least eight feet apart.
9. Aisles should be free from obstructions at all times.
10. Pallets should be used in all storage locations.
11. Suggested stacking levels of FG inventories stored must be followed.
12. Good inventories must be segragated from expired/ nearly expired inventories.
For the month of October 2014
a) Fire extinguisher
b) Fire Hose
c) Fire exit
d) Fire alarm trigger
6. Roofs, walls, floors, and ceilings should be free from cracks and other major damages.
PROCESS OBJECTIVES
To ensure that the inventories are in good conditions.
To ensure safety and security of warehouse personnel.
RISKS
Damaged/stolen inventories
Safety Hazards
POLICIES
1. All warehouse personnel should be properly trained on all warehousing and safety procedures.
2. There must be a safety evacuation plan.
3. Safety gears should be worn while inside the warehouse premises.
4. Firefighting equipment and early warning devices should be clearly and easily identified inside the
5. All entry and exit points should be secured from unauthorized access.
13. Security guards should check for Gate passes for all outgoing goods.
7. Temparature should be maintained at not more than 33 degrees Celsius.
8. Racks should be at least eight feet apart.
9. Aisles should be free from obstructions at all times.
10. Pallets should be used in all storage locations.
11. Suggested stacking levels of FG inventories stored must be followed.
12. Good inventories must be segragated from expired/ nearly expired inventories.
Audit of Warehouse
PsychoKath Company
For the month of October 2014
AUDIT PROCEDURES
1. Interview 3 warehouse personel
2. See if all requirements are met
3. Observe the facility and warehouse personnel
4. Check there are security in all entry and exit point
5. Observe Storage of Goods
6. Obtain 5 samples of Receiving Report
7. Verify goods received match those listed on the Receiving Report
Audit of Warehouse
PsychoKath Company
For the month of October 2014
knows the complete safety procedure and is aware of all the responsibilities of each
personnel
(new) after 2 weeks of working, he's not yet oriented in safety procedures
knows the safety procedure
Outdated Safety Evacuation plan. the plan is based on the warehouse before
renovation
Findings
none
none
none
unrepaired cracks
slippery and there are still unrepaired cracks and holes covered with plywood
there are leaks on ceiling
no room thermometer and no cooler to lessen the temperature
none
there pallets and plastics crowding the aisles
none
all of the entrance and exit has no log records. One exit has no security. And only the
security guard in the main entrance look for Gate passes
Insufficient safety gears. There are only 5 safety gears for 10 warehouse personnel
expired for almost 2 years
none
the door has no sign and is locked
3. Floors
2. Walls
1. Roofs
2. Quentin Lance
Storage of Goods
Entrance and Exits
8. Pallets
7. Aisles
9.warehousing personnel
c) Fire exit
b) Fire Hose
a) Fire extinguisher
6. Racks
5. Temparature
1. Oliver Queen
Warehouse Personnel
(interview)
all of them are working and only 5 of them are wearing safety gear
Match
Receiving Report
3. Firefighting equipments
2. Safety Gears
1. Safety Evacuation Plan
Requirements
3. Malcolm Merlyn
Facilities and warehousing
personnel
d) Fire alarm trigger
4. Ceilings
Receiving
Report no.
Goods
Received
Actual
Goods
Received
56701 4000 3937
N
56702 3500 3500 M
56703 1000 873
N
56704 2800 2800 M
56705 7600 7511 N
Match
knows the complete safety procedure and is aware of all the responsibilities of each
personnel
(new) after 2 weeks of working, he's not yet oriented in safety procedures
knows the safety procedure
Outdated Safety Evacuation plan. the plan is based on the warehouse before
renovation
Findings
none
none
none
unrepaired cracks
slippery and there are still unrepaired cracks and holes covered with plywood
there are leaks on ceiling
no room thermometer and no cooler to lessen the temperature
none
there pallets and plastics crowding the aisles
none
all of the entrance and exit has no log records. One exit has no security. And only the
security guard in the main entrance look for Gate passes
Insufficient safety gears. There are only 5 safety gears for 10 warehouse personnel
expired for almost 2 years
none
the door has no sign and is locked
all of them are working and only 5 of them are wearing safety gear
Findings
(interview) Warehouse personnel miscounted goods
none
(interview and CCTV) unknown people was seen in CCTV stealing goods
none
(interview) Goods were damaged while beeing transferred
Findings
Audit of Sales Department
PsychoKath Company
For the month of October 2014
PROCESS OBJECTIVES:
To manage cost of sale
RISK
Giving unauthorized trade discount
POLICIES
1. There should be a list of Approved trade discounts for all major accounts /
customers signed by the President and Sales Director.
2. Sales Department should prepare SO with approved terms and discounts, and
forward copies to Accounting, Warehouse and Shipping departments.
3. Upon shipment of goods, Shipping Department should forward a copy of Delivery
Receipt to Accounting Department with reference to corresponding SO.
4. Accounting Department should issue invoice based on the Delivery Receipt and
Approved SOs terms and discounts.
Audit of Sales Department
PsychoKath Company
For the month of October 2014
AUDIT PROCEDURES
1. Obtain list of Approved Terms and Trade Discounts
2. Obtain 10 samples of Invoice
3. Verify if the terms and Discounts in invoice is within the approved
terms and Discounts
Audit of Sales Department
PsychoKath Company
For the month of October 2014
APPROVED TERMS
Gross Sales Trade Discounts Trade Discount (%) Trade Discounts (%)
12301 500,000.00 25,000.00 5% 5%
12302 650,000.00 52,000.00
8% 6%
12303 780,000.00 15,600.00 2% 5%
12304 200,000.00 4,000.00 2% 2%
12305
840,000.00
58,800.00
7% 7%
12306 450,000.00 22,500.00 5% 3%
12307
456,000.00
22,800.00
5% 3%
12308 300,000.00 30,000.00 10% 10%
12309
1,000,000.00
200,000.00
20% 8%
12310 789,000.00 47,340.00 6% 6%
Invoice No.
Invoice
- Ms. Chloe Grim
None
13,000 Mr. Harry Blood
(Interview) Changes in approved trade discounts made. Sales Dept. already
prepared a new Sales Order
(23,400) Mr. Ethan White Approved by unathorized personnel
- Mr. Harry Blood none
- Ms. Amie Dark
(Interview) Approval of Trade Discount was delegated to Ms. Amie Dark by Ms.
Chloe Grim
9,000 Ms. Chloe Grim (interview) Human error in preparing Sales Order.
9,120 Mr. Harry Blood
(Interview of sales personnel) Sales Dept. has been increasing some of the
trade discounts for some favored clients
- Ms. Chloe Grim none
120,000 Mr. Harry Blood
(interview) Sales made even without approval. Forging of Mr. Harry blood's
signiature
- Ms. Chloe Grim none
FINDINGS Difference Approved by: