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Forums Internal Audit Common Internal Audit Observation in P2P Audit

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  • Common Internal Audit Observation in P2P Audit

     Divesh Daga updated 5 months ago 3 Members · 4 Posts
  • Admin

    Administrator
    May 30, 2021 at 12:16 pm

    So one of the key processes in every company is procurement. While doing an audit of this process you will go through many observations but as per my experience Few of the most common observations while doing purchase to pay audit is as follows:

    1. Material Rate Variance:-
    As a standard process, every material purchased by a company should be from the authorized dealers on the rate contract basis. The materials which are not assigned to any dealer/vendor are purchased from the local market. After rate comparison of rates through a comparative statement. But while doing Audit of Purchase dept. you will find that same material is purchased at different prices. You can divide this observation into 4 parts.

    1. Material purchased from different vendors at a different rate on a different date.

    2. Material purchased from different vendors at a different rate on the same date.

    3. Material purchased from same vendors at a different rate on different Date.

    4. Material purchased from different vendors at a different rate on the same date.

    Common Auditee comments on this observation:

    Variance due to built quality of different products, Emergency Purchases, Inflation Increase in transportation cost

    How to Identify this Observation :

    – Extract the PO Report

    – Make a pivot.

    – Filter on Material code

    – Identify their min and max unit price.

    – Identify cases with high deviations

    2.Open Purchase Orders

    This is also a very common observation in all audits and the main reason for this is lack of control mechanism in the process. and there should be a proper control over Open POs and PRs and must be timely closed.

    Common Auditee comments on this observation:

    -Running POs

    -Open POs will be reviewed and will be closed

    How to Identify this Observation :

    Just filter those POs against which no material is received till date ( consider those for which material is pending for more than 90 days)

    Hope you will identify this very easily

  • Kanishka Edirisooriya

    Member
    May 31, 2021 at 12:23 pm

    Hi,

    I’m doing P2P audit in SAP base company. Also I have saw your P2P audit checklist that has been shared in YouTube. That has nice content. Since whole process run through the SAP. Can you help with some of T codes with can be useful for audit the P2P process.

    • Divesh Daga

      Member
      April 30, 2022 at 3:50 am

      Can you please share the link of that video?

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    Administrator
    May 31, 2021 at 2:05 pm

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