PHILIPPINE INTERNATIONAL TRADING CORPORATION

AUDIT PROGRAM

Audit Focus
(Area/Account):
 Accounts Payable

Account Description:
 Trade Payables are present obligation of the Corporation arising from past
event, the settlement of which is expected to result in an outflow of resources.
This account consists of unpaid charges and purchases from suppliers of
items for sale of the following PITC business units such as Government
Procurements, Exports.

Risk Statement/s:
 There may be balances of payables that do no longer exist.
 Not all unpaid balances of the suppliers and contractors are included.
 Payables may not be correctly valued in conformity with PFRS.
 To confirm whether the entity does have a right over these accounts and that
third parties do not have claims over such assets.
 Payables may not be properly presented and adequately disclosed in the
financial statements in conformity with PFRS.

Audit Objectives:
 To ascertain that the recorded payables represent the obligations of PITC for
actual goods and services delivered by the suppliers/contractors.
 To ascertain that all obligations to suppliers/contractors are completely and
accurately recorded.
 To confirm whether amounts reported in the books represent the amount at
which the accounts payable are actually collectible.
 To determine that payees are valid claimants.
 To determine whether obligations for goods and services are paid when due.
 To ascertain that payables are properly presented and adequately disclosed
in the financial statements.

Man-days
Assertion/s Audit Procedures WP Person
Ref Estimated Actual Responsible
Completeness, Agree/reconcile the account payable
Valuation ledger balances to accounts
payable control account and
schedule of sub-accounts.

Valuation, Perform a review of accounts

Presentation payable sub-ledgers for any unusual
and Disclosure items, i.e., significant debit
balances, and other unexpected
amounts.

Existence, Vouch/trace significant balances to

Completeness, source
Valuation documents/contracts/accounts
 payable vouchers.

Compliance Check the due dates/payment terms

and identifies overdue accounts;
verify causes of non-payment and
determine the effect of non-
compliance with the terms.

Validity Identify long outstanding balances

without claims on file and consider
the reversal/adjustment of the
balances to retained earnings.

Validity Verify and check whether

adjustments/reversion made during
the period are proper and
authorized.
Existence, Verify year-end accruals and check
Validity the reasonableness of amounts and
occurrence of accrued expenses.

Existence, Send confirmation requests to major

Completeness, creditors and or verify subsequent
Valuation period payments and investigate
any discrepancies in balances.

Existence, Trace the unpaid/outstanding

Completeness, balances as at subsequent period
Valuation payment date to source documents
and determine the validity of
payables.

Existence, Perform cutoff tests for goods and

Completeness, services received to ensure that
Rights and transactions are completely
obligations recorded in the correct period.

Completeness, Search for unrecorded payables

Valuation from goods/services received from
suppliers/contractors few days
before and few days after the
balance sheet date.
Presentation Check whether payables are
and Disclosure properly presented and adequately
disclosed in the financial
statements.
Prepare Audit Observation
Memorandum (AOM).

Prepared by: Reviewed by: Approved by:

FRANCES KAYE B. ANTONIO

State Auditing Examiner II
Audit Team Member