Optimize sales audit procedures for sport organisations with airSlate SignNow

How to create outlook signature

Hello friends and welcome back to my channel auditing tricks in this video I am going to discuss about the processes which were involved in the purchase department and how we can verify them during the audit purchase process this is the most important and Main Department of each company and organization purchasing department is very important for the successful Supply Chain management system typically they help other departments to identify their needs manage the requisition process and Source competitive prices from the market and act as a controllers to ensure adherence to various departments cost budgets so join me in this video and I will help you to understand what all sub processes and activities a procurement Department follows to do a successful purchase I will also provide you the tips and checkpoints what all you need to verify as an auditor in each of the sub process but before that don't forget to like the video share its link with your friends and subscribe to my channel for more educative and informative videos let's see in detail what all activities and sub processes involved in the procurement process which an auditor should know purchase budgeting and planning procurement department is deeply involved in spending the company's money to satisfy the needs of various departments in this stage each department of the company defines an estimate of the cost which they forecast for spending in future procurements after approval from respective department hods and top management the budget is shared with the procurement team and they ensure that all the procurements during the approval period were made within such approved budget only as an auditor we can check if the budget was prepared and approved as per delegation of authority metrics or not we can compare the cost Enterprise approved budget amount with the actual procurement expense each department has made we can check if exceptional approvals were obtained for the higher procurements or not item Master management process item answers the data which captures all the part codes or skus of the company which were procured in case a new item is to be procured then the company's Master data management team helps in creating the item Master data in software so the respective Department can make purchase requisition and PO for it item master of each item contains system generated unique item code description of your item unit of measurement storage location Etc as an auditor we can verify if the new item codes were created with a request from store or user department and it contains required approvals we can compare the request form and master data to ensure completeness and correctness of the master created we can check if any duplicate description item is included in the master purchase requisition and indenting process based on the requirements the user Department checks with the store team if such material were available or not if material was not available then the store Department raised the purchase requisition known as PR in the system by mentioning the item code details required quantity date by when the material is required the pr is approved by store in charge after which the purchase Department initiates the procurement as an auditor you can take the pr dump and verify if all the peers were approved by the respective user Department hod and store in charge as well Additionally you can verify the gap between the pr creation date and peer approval date to know the reasons for delay in the procurement also we can verify if there are peers which are pending for approval as on date and we can calculate the aging from today's date to highlight the unnecessary requisitions vendor selection process after PR approval the purchase teams and RFQ request for quotations to the potential vendors and ask their quotations for supplying such products on receipt of quotations from multiple vendors the purchase team prepares a competitive analysis which includes comparison of price delivery charges tax quantity Quality Discount Etc of all the vendors this competitive statement is further approved as for the DOA Matrix to finalize the vendor for supplying such material as an alter we can take sample of purchase orders raised and verify if multiple quotations were obtained to finalize the vendor whether the selection process have a documented comparative statement and its approval aspect DAV metrics we can also find cases where the vendor other than lower quoted vendor was selected but no exception approval was obtained as per Dua metrics hope you're liking the video please subscribe to my channel hit like to the video and share its link with your friends po generation and approval process after vendor selection of purchase order was created in system by the purchase team the PO is made against a particular PR number and includes the vendor selected material details quantity to be purchased text terms payment terms and delivery terms all POS are further approved in system as per the UA Matrix defined as an auditor we can take podam from system and verify if POS were approved as per Duo metrics or not we can calculate aging of Po which were pending for approval and question their requirement we can compare the pr and po quantity if PO is created for quantity more than the pr requirements also we can check the vendor code and comparative if T was made as per proof rates and terms or not guys don't forget to subscribe to my channel and hit like to the video also you can comment on the section box which topics you would like to understand and know I will make more videos on those topics when the master data management process in case a new vendor is fine likes then the purchase team fills the vendor details in a new vendor creation form along with the supporting documents like their financial statements Bank details text document Etc and share the same with the MDM team for creation of a new vendor code in the system if any vendor details are to be changed in future then also changes to be made in the system by the MDM team as an auditor we can review the completeness and accuracy of the wind Master data to identify duplicate vendors we can review the documentations of sample vendors to verify if the correct details are entered in the system by MDM team like Bank details text numbers Etc stock delivery Management on receipt of material the stock was unloaded and counted by the store staff to reconcile with the pon invoice quantity this is done to ensure that the stock received is what the company has ordered and full invoice quantity is received in case excess material was received the differential quantity was sent back to the vendor and jiren was posted for the invoice quantity only in case less materials was received then the jiren was posted with the actual quantity received and note was mentioned on invoice about the less quantity received so that the finance department do not make full payment to the vendor as an auditor we can do vouching of purchase invoices with the grn data to ensure correct quantity of grn was done by the stored staff check gap between due date of delivery as per po terms and actual date of material delivered by the vendor check if there is difference between actual weight of material as per weighbridge and weight as per invoice check if excess material was sent back or still pending next is quality check in stocking after grn posting the quality Department take a sample of received items verify it against the predefined standards and give a decision of pass or fail to the grn every company sets the standards of each material type and mention the ranges within which the material will be qualified as a QC if the material was passed by QC Department then the store staff place the material in respective storage location bin or area if the material was rejected by QC Department then the material is to be sent back to the vendor as an auditor we can check the gap between grn date and the quality check date to highlight the efficiency of the quality Department we can also see the Aging of cases where quality check spending as on date we can review material wise vendor wise data of grn versus QC failure percentage verify if QC reports were approved by the appropriate Authority we can also verify if QC parameters were followed for quality testing vendor evaluation and Appraisal process on periodic basis the supplier evaluation done by purchase Department to analyze whether the suppliers were performing well on the various criterias like quantity delivered quality of material supplied discounts offered timely delivery price offered Etc the evaluation reports were shared with the respective suppliers so that they can work on the areas where they were lacking and to provide the better goods and services in future as an auditor we can review if the evaluation criteria and their rankings were provided correctly or not to the supplier this can be checked with grn and quality data from sap we can check if all major material vendors were covered under this Evolution activity or not we can verify if action plan was implemented where valuation was weak so friends we have covered all the sub processes which were involved in the procurement process I hope I have made lot of things clear to you and have also given so many suggestions how you can audit the purchase process I will meet you in the next video till then please subscribe to my channel share its link with your friends and do like the video you can comment if you want to know more topics about the internal audit and risk management