Applications of IDEA - Accounts Payable
Accounts Payable may have less audit significance, as suppliers will normally raise any problems. However, it is important to establish that liabilities are neither understated nor overstated.
Many tests relate to supplier master file details. This often resides on a different file to the detailed ledger items. IDEA can help in several ways:
Analysis
- Reconcile/check register to disbursements by vendor invoice
- Summarise invoices by supplier to prove individual balances
- Isolate vendor unit price variances by product
- Total posted invoices for the year for accurate vendor rebates
- Evaluate purchasing contract compliance
Calculation
- Total the file. It is often best to separate debit and credit balances (use field statistics option)
- Calculate days in accounts payable and average days for invoices to be paid
Exception Tests
- Identify debit balances
- Identifying unusual standing data
- Identify old invoices
- Test for items with dates or references out of range (cut-off)
- Identify and total liabilities for goods received and not yet invoiced
- Find invoices without purchase orders
- Identify lost discounts not taken
Gaps and Duplicates
- Test for duplicate payments/invoices
- Test for duplicate bank account details
- Test for duplicate purchase order numbers
Matching and Comparing
- Match subsequent period payments against period and balances to identify unmatched payments
- Compare the master file at two dates to identify new suppliers
- Compare invoices posted against purchase order amounts
- Compare supplier names, addresses to employee file
- Compare recurring monthly expenses to paid invoices
Sampling
- Most sampling options apply