We looked at the checkpoints for requisitioning & ordering earlier, click here to learn about it. We will now look at the receipt of the goods & services process.
Once the purchase/service order is placed, the materials/services are expected to arrive basis the lead time defined. Receipt of materials (tangible) is expected to happen at the factory/warehouse and the stores’ team is the main function that takes care of the receipt of materials. Services on the other end depend on the terms & conditions and it depends on milestones., for e.g., we usually divide audit fees into three parts, payment at the time of signing the engagement letter, submission of report and completion of the audit. So, the accounting for invoices happens differently for goods & services.
Some of the key things to note while auditing GRN & invoicing is to make sure that the system controls are in place.
- Can the GRN be booked for a quantity more than PO?
- Can they change the rate of the material at the time of booking the GRN?
- How does the GRIR (goods receipt/invoice receipt) process function? Understand the control function.
These are basic checks; further checks are to be done which is only limited by imagination. Let’s dive deep into some of the test steps:
Thanks for reading. Until next time!
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Amma
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