Contributed 9/18/00 by Michael Awad
Corporate Review EXPENSE REPORTS Instructions: * Check each audit step as it is completed with the correct corresponding attribute "yes", "no", or "n/a". * Each auditor that completed any audit assignment step, must sign the audit program below. * The In-charge auditor must also sign the audit program below. Audit Objective and Scope To assure that: * reimbursements to employees for travel and other expenses were proper; * expenses were incurred while conducting legitimate Company business; * funds advanced for anticipated expenses were accounted for, and; * expenses were charged to the proper cost account. Y N/A II. Pre-audit Work: N
* Obtain and Review: * Prior audit report and correspondence. [] [] [] * Current Company policies and instructions for expenses. [] [] [] * Account trial balances for all expenses accounts - (i.e. Prepaid Travel Expenses/Advances, Expenses) [] [] [] 2. Determine sample sizes for the various types of expense reports to be audited. [] [] [] III. Expense Report Controls
1. When obtaining an advance of funds, is proper approval obtained for expense advance requests? [] [] [] a. Are expense reports submitted to Accounting within two weeks following completion of a trip? [] [] [] b. In instances where completion is delayed, due to lack of receipts, etc., is a partial report submitted containing substantiated expenses? [] [] []
3. Are appropriate controls established to ensure timely completion of all expense reports? [] [] [] 4. Are all expense reports audited by Accounting for correctness, and that claimed expenses meet company reimbursement policies? [] [] [] 5. If an expenditure was questionable, was the report returned for additional information and/or approval by appropriate management? [] [] [] . * Review procedures for recording expenditures to the proper expense accounts in the General Ledger [] [] [] 7. Are reimbursements paid directly to the employee for company credit cards? [] [] [] NOTE: The company should NOT be paying credit card companies directly. This puts the company in a position of liability in which it has no control. IV. Travel Advances
1. Review Prepaid Travel Expenses, record by person, take all unresolved expenses over 60 days old and determine status. [] [] [] 2. If a travel advance has not been resolved two weeks after the expense was incurred (expense report), is a letter sent by accounting to the person to request compliance? [] [] [] 3. of funds. [] [] Prepare a list of those persons holding a "permanent" advance [] []
* Verify that these persons are still employees. [] []
* Consider recalling funds to verify that the funds are still in their possession. [] [] [] 4. If an employee is terminated, what action is taken to secure repayment of an advance? [] [] [] 5. In the case of certain company representatives, funds advanced at the beginning of employment are later deducted from monthly expense reports on an agreed upon basis. Verify that such advances were
collected or are still being deducted. [] [] [] V. Expense Report Select the appropriate number of expense reports to be Document and review the following: department number name total cash advanced charged items amount due company [] [] [] [] []
1. audited. a. [] [] b. [] [] c. [] [] d. [] [] e. [] []
f. amount due staff member g. Are supporting receipts attached for all expenditures of $75 or more? [] [] [] NOTE: A receipt is required to support a claim when the combined total expense of the employee and guest(s) exceeds the $75 limit, even though the individual expense does not exceed $75. h. Has proper approval been obtained? [] [] [] i. Verify expenditures are for authorized purposes. [] [] [] j. Are reimbursable items itemized? [] [] [] k. Is the guest section itemized and completed in full with all appropriate receipts attached? [] [] [] l. Verify receipt amounts to amounts claimed. [] [] [] m. Are all totals computed correctly? [] [] [] 2. Areas of special focus:
a. Are adjustments being processed in a timely manner? [] [] [] b. Are the permanent advances too much/little? [] [] [] c. Are drafts being used in sequential order? [] [] [] d. What is done if a draft has been cashed and the detail is considered late? [] [] [] e. If the road reporter terminates, what is done to ensure COMPANY assets are not abused? [] [] []
f. [] [] NOTE: fare. g. [] []
Is personal car mileage computed correctly?
[]
Total car mileage reimbursement must not exceed air Is air travel limited to coach and tourist class? []
NOTE: If not, are exceptions for air travel costs approved by appropriate management?
AUDITOR ??
DATE AUDITOR
DATE
HEADQUARTERS EXPENSE REPORT