Description and Response to Audit Risk 3
The payables ledger clerk has recently discovered a batch of supplier invoices that had been mis-coded and therefore had not been recorded as trade payables.
This error has now been corrected but investigations are still ongoing to determine how this happened
The payables payment period has decreased from 64 days to 39 days
Describe the Audit Risk
A batch of invoices was miscoded and was not recorded as trade payables.
Investigations are still ongoing to identify whether there are any other batches of miscoded invoices.
The payables payment period has decreased from 64 days to 39 days.
There is a risk that there are other batches of miscoded invoices.
If these are not identified and corrected by the year end, purchases and trade payables will be understated