CLIENT NAME

Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
1. Verify whether the ▪ In order to verify the actual quantity received System
payments are released for against amount already released/payments
actual quantity received. released for actual quantity received
(whichever case is applicable), go to
transaction code FS10N & select sample
invoices
o Enter Company Code
o Enter GL Accounts
o Enter Fiscal Year
o Execute
▪ Use Transaction code ME23N for PO
display.
o Enter valid PO no.
o Select a PO item
o Menu: Item –l Details
▪ Verify GR/IR quantity with Invoice quantity.
▪ Go to PO History Tab and check for Goods
Received and Invoice Receipts Document
(GR/IR).
2. Verify whether all ▪ Use transaction code S_P99_41000101 or System
documents required for FCHN -check register to take out the list of
payment of the bill have check payments release on a specified time
been received before interval.

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
release of payment. o Enter paying company code.
o Enter house bank ID
o Enter account ID
o Execute
o This report gives a list of transactions
made from the selected bank.
▪ Take a sample of high value transactions
made on a specified date.
▪ Take the vendor code from the payment
document (list of check register) and use
transaction code FBL1N for display of
vendor line items.
o Select the document number and double
click on the selected document number
and go to document overview.
o This will open the financial document and
from this click on ‘Environment’ tab and
select accounting documents.
o The popup box will appear and select the
‘original document’.
o This original document is the invoice
document.
o Verify the PO from the invoice and

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
double click on the PO number.
o This displays the original PO document.
▪ Verify the PO, GR/IR (if applicable) and
invoice for the vendor payment released
document.
▪ Physically verify that the purchase order,
GR/IR (if applicable) and the invoice for the
selected sample is available.
▪ Check the gap, if any, between Date of
inspection and date of freight invoice
▪ Take the samples from the Bank statement,
where the debit entries exist without a
corresponding cheque number and match the
entry with the cash register. In cases where
such debit entries pertain to ‘Authority of
payment’ or ‘direct LC payments’, check
whether appropriate documentation and
approvals exist.
▪ Physically verify if the following documents
are available:
o Original Bill of lading/Original Lorry
receipt,
o Original delivery challan,

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
oLetter of Intent (LOI)
oAgreement
oJob order,
oInspection reports,
oCommissioning reports
oOriginal QCC,
oOriginal Invoice duly certified by
competent authority,
o CENVAT/VAT Documents
o Original bank intimation, etc.
▪ Also verify whether adequate records are
maintained for CENVAT/VAT received and
utilized.

3. Verify whether the ▪ Use transaction code S_P99_41000101 or System

payment of the bill was FCHN -check register to take out the list of
made to the vendor on check payments release on a specified time
whom original purchase interval.
order was placed. o Enter paying company code.
o Enter house bank ID
o Enter account ID.
o Execute

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
o This report gives a list of transactions
made from the selected bank.
▪ Take a sample of high value transactions
made on a specified date
▪ Take the vendor code from the payment
document (list of check register) and use
transaction code FBL1N for display of
vendor line items.
o Select the document number and double
click on the selected document number
and go to document overview.
o This will open the financial document
and from this click on ‘Environment’ tab
and select accounting documents.
o The popup box will appear and select the
‘original document’.
o This original document is the invoice
document.
o Verify the PO from the invoice and
double click on the PO number.
o This displays the original PO document.
▪ Compare the vendor code in original PO
with vendor code in payment document.

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
▪ Verify that the payment was made to vendor
specified in purchase order. Additionally,
check if the vendor code at LIV stage and
PO stage matches. If they are same, still
check for ‘Individual payee’ field in
payment tab of LIV, (‘Individual payee’
field is used for payment to other than PO
vendor only).
▪ Obtain reasons for payments made to party
other than specified in Purchase Order.
▪ Verify the documents for which payment has
been made to the ‘Alternate Payee’ instead
of the actual vendor listed on the PO.
▪ Check the cases of high value payments and
obtain the reason for the same.
4. Verify whether the prices ▪ Use transaction code FBL1N for the vendor System
charged & delivery dates ledger
are reviewed prior to o Enter Vendor no.
passing of bills. o Enter Company Code
o Select from ‘Open item’, ‘cleared
item’ or ‘all item’.
o Enter the date range
o Select the document number and double

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
click on the selected document number
and go to document overview.
o This will open the financial document
and from this click on ‘Environment’ tab
and select accounting documents.
o The popup box will appear and select the
‘original document’.
o This original document is the invoice
document.
o Verify the PO from the invoice and
double click on the PO number.
o This displays the original PO document.
▪ Verify the PO, GR/IR and invoice price for
the vendor payment.(Here system checks Manual
that Invoice price is not more than PO price.
Also take into account tolerance limits set
where ever applicable)
▪ Check PO for any amendments related to
delivery date and price.
▪ Check the ‘Unplanned delivery cost’ field
under the details tab of Logistics Invoice
Verification (LIV) particularly used for
escalation/rate fluctuations.

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
▪ Repeat above steps for a sample of invoices
and review whether the prices charged in the
invoice are as per the purchase order.
▪ Review the reasons for changes made to
price charged other than that of purchase
orders.
▪ Compare the PO delivery date with actual
delivery date.
▪ Verify whether LD has been deducted for
delayed supplies.
▪ Obtain reasons for non-deduction of LD.
5. Verify whether the ▪ Use transaction code FCHN and System
maximum benefit of credit o Enter paying company code
period as specified in the o Enter house bank ID
contract has been taken
before the release of the o Enter Account ID
payments. o Execute
▪ Take a sample of high value transactions
made on a specified date
▪ Take the vendor code from the payment
document (list of check register) and use
transaction code FBL1N for display of
vendor line items.
▪ Select the document number and double

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
click on the selected document number and
go to document overview.
▪ This will open the financial document and
from this click on ‘Environment’ tab and
select ‘original document’.
▪ This ‘original document’ is invoice
document and check for the invoice date &
posting date in the system.
▪ Compare with physical copies of the
contract to verify the credit period specified
in the contract was utilized before the
release of the payments.
▪ If payments are released before the due date
as per contract, the reasons thereto should be
obtained including any competent authority
approvals.

6. Verify whether the advance ▪ Check whether the release/ approval strategy System
payment/down payment is was used to authorize down payment.
properly authorized. ▪ Obtain list of persons authorized to approve
advances within system from system
administrator.
System
▪ Verify whether approving authorities are in
line with responsibilities and are as per

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
BDP/MM.
7. Verify whether no ▪ Use Transaction code S_ALR_87012105 for System
advances/down payment getting the list of pending down payments
are lying open for long (exclusive of LC/LSC payments) not yet
duration cleared.
o Enter company code
o Enter fiscal year
o Enter Vendor account
▪ Review the outstanding down payments and
the reason thereof.
▪ This SAP report gives details of open down
payments on a given date.
8. Verify whether old ▪ Use transaction code FBL1N for display of System
advances are cleared before vendor line items.
releasing new advances. o Enter Vendor no. range
o Enter Company Code
o Select from ‘Open item’, ‘cleared item’
or ‘all item’
o Check the special GL indicators
o Go to dynamic selections and select
special GL indicators “A”
o Enter the date range

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
o Execute
o The report generated to be exported to
excel.
▪ Sort the report Vendor wise-Date wise and
filter for special GL indicator ‘A’.
Manual
▪ From the list check for advances released
without clearing old advances.
▪ Obtain reasons for such instances.

9. Verify if the aging analysis ▪ Use transaction code S_ALR_87012105 for System
of advances given to the the list of pending down payments not yet.
suppliers is done and o Enter company code
adequate action is taken for o Enter fiscal year
the old outstanding
balances o Enter Vendor account
o Sort the list by vendors
▪ Check if any down payment is outstanding Manual
for more than the specified time.
▪ Check that outstanding down payments have Manual
been reviewed by the senior officials.
10. Verify whether no ▪ Check that at the time of logistics invoice System
duplicate payments are verification (LIV) the vendor invoice
made. number is mandatory.

11
CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
▪ Verify that the system throws an error
message when the same vendor invoice
number is captured again.
▪ Obtain a report based on the vendor invoice
number captured at that time of LIV from
the SAP tables using transaction code
YSE16.
▪ Alternatively, go to transaction code FBL1N
to check for duplicates wherever same
invoice numbers are repeated
o Enter Company Code
o Enter Vendor account
o Select Open/Cleared/All items
o Execute
o The report provides vendor line item
details.
o Export the report in Excel and sort data
by ‘Reference’ field.
o Check for duplicate Invoice Numbers
and report the same.

11. Verify whether payments ▪ Use transaction code FCHN and System
are released on time.

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
o Enter paying company code
o Enter house bank ID
o Enter Account ID
o Execute
▪ Take a sample of high value transactions
made on a specified date
▪ Take the vendor code from the payment
document (list of check register) and use
transaction code FBL1N for display of
vendor line items.
o Select the document number and double
click on the selected document number
and go to document overview.
o This will open the financial document
and from this click on ‘Environment’ tab
and select ‘original document’.
o This ‘original document’ is invoice
document and check for the invoice date
& posting date in the system.
▪ Compare with physical copies of the
contract to verify that payments are released
by the due date.
▪ For instances of long delay, obtain reasons

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
for the delay.
▪ Alternatively, go to transaction code FBL1N
o Enter Company Code
o Enter Vendor account
o Select Cleared items
o Execute
o Now go to change layout and select ‘net
due date’ and ‘clearing date’ and
compare the two dates for delays
▪ Alternatively, compare with the
S_ALR_87012084 - Open Items – Vendor
Due Date Forecast.
o Enter range of Vendor code
o Enter company code
o Enter ‘open items at key date’.
o Execute
o The report shows the balance payable for
a vendor in the range of 8 days in 30
days and over 30 days.
▪ Take out physical copies of invoices for
items with delay more than 30 days and
check the date of receipt of vendor invoice

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
by ABC.
o Based on the above obtain reasons for
payments outstanding for long time.
12. Verify whether payment ▪ Use Transaction code (as defined by the System
against Letter of Credits is client) for Letter of credit to capture details
released by bank after of L/C in SAP.
receipt of all the required ▪ Take out a sample of few cases of payments. Manual
documents. ▪ Verify that the L/C payments were released
by the bank on the basis of all required
documents.
▪ Verify that the instructions were given to the
bank for release of payment only on the
receipt of the required documents.
▪ Verify terms in L/C with the terms of the
purchase order.
13. To verify appropriateness ▪ Use Transaction code (as defined by the
of Letter of Credits charges client) for Letter of credit to capture details
debited by bank. of L/C in SAP.
▪ Take out a sample of few cases of high value
payments.
▪ Get the details of various bank charges paid
on those LC cases
▪ Verify for bank charges which should be
charged, as per the rates agreed with bank.
▪ Compare the bank charges being paid to

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
other banks in the region and make a
comparative analysis.
▪ Check for the case, if any, of over/under
payments of bank charges.
14. Verify whether appropriate ▪ Use transaction code (as defined by the System
deductions for Income Tax client) to get the details of tax item.
and Works Tax were made. o To execute the report
➢ Enter company code
➢ Enter fiscal year
➢ Enter section code
➢ Enter withholding tax code key.
o This reports gives the details of the
➢ withholding tax rate
➢ withholding base amount
➢ withholding tax amount
▪ Obtain a summary of TDS from above
transaction for previous few months.
▪ Verify correctness of rates as per the nature
of jobs looking at physical documents.

▪ Alternatively, go to transaction code FBL1N

o Enter Company Code
o Enter Vendor Account
o Select Open/Cleared/All items
o Execute

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
o The report obtained shows the
withholding tax rate, withholding base
amount & withholding tax amount
o Select the document number and double
click on the selected document number
and go to document overview.
o This will open the financial document
and from this click on ‘Environment’ tab
and select accounting documents.
o The popup box will appear and select the
‘original document’.
o This original document is the invoice
document.
o Verify the PO from the invoice and
double click on the PO number.
o This displays the original PO document.
o From the original PO document check
whether TDS is applicable.
o Obtain reason if tax deducted is not
deducted.

15. To verify if access to ▪ Obtain from the administrator the list of System
invoice processing users authorized to the transactions MR01-
functions/data is restricted create, FB02-change document, FB08-

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
to authorized personnel. reverse document, MR8M – (Cancel Invoice
Document ),FB02 (Change), FBV2
(Change),FBVO (Post/Delete), FBRA(Reset
cleared items )
▪ Check with the accounts payable process
owner, if the authorizations given are as per
responsibilities handled.
17. To verify periodic ▪ Use the transaction code (as defined by the System
reconciliation of accounts client) for the vendor wise/ GL head wise
payable balances to report.
supplier statements for o Enter the vendor code
significant suppliers o Enter company code
o Execute
▪ The report gives the details of outstanding in
local currency for the vendor under specified
GL head.
▪ Compare the report with the statements
received from suppliers.
▪ Obtain reasons for differences, if any.

18 To verify and review the ▪ Use transaction code S_P99_41000101 or

correctness and FCHN -check register to take out the list of
appropriateness of check payments release on a specified time
accounting entries interval.
o Enter paying company code.

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
o Enter house bank ID
o Enter account ID
o Execute
o This report gives a list of transactions
made from the selected bank.
▪ Take a sample of required vouchers.
▪ Take the vendor code from the payment
document (list of check register) and use
transaction code FBL1N for display of
vendor line items.
o Select the document number and double
click on the selected document number
and go to document overview.
o This will open the financial document
o Review for the expenditure and relevant
account code, WBS, cost centre etc, of the
relevant financial / commercial document
o This may be verified by verifying the
physical supporting document received
form the concerned indenting department

19. To verify proper ▪ Use transaction code S-ALR_87012086

maintenance of vendor o Enter vendor range

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CLIENT NAME
Audit Program – Accounts Payable

Sl No Control Objectives Audit Steps SAP Report WP Completed Reviewed

System or Ref Review By/ Date By/ Date
manual
master o Company Code
o Execute with all further selections
▪ Check whether all the details pertaining to
PAN No., Service Tax No., Bank Account
No. MICR Code etc are properly populated.
20. To verify that no ▪ Use transaction code SE38 ((as defined by
differences exits between the client))
vendor sub-ledger & GL o Run report RFKSLD00
o Execute
▪ This report will display differences between
subsidiary ledger and corresponding general
ledger control account.
▪ Inquire into abnormalities if any.

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