Audit and Accounting > Creditors

The creditor business is one of the areas in which IDEA is most successfully applied. The main objective is to assess the validity. This encompasses instances of supplier over-pricing, invalid invoices, frauds of various types, accidental duplication, and simply identifying out-of-control expenses.

The following are commonly used tests (grouped by type).

Analysis

  • Total the value of invoices
  • Identify large payments to suppliers but summarising by supplier
  • Stratify by payment value and identify potential invoice splitting below authorisation levels
  • Analyse payment type and identify cash payments

Calculations

  • Calculate the number of days that it took for invoices to be paid and identify irregularities

Exception Tests

  • Identify records where the is variance between the order amount and the invoice amount
  • Identify and check valid any missing VAT values
  • Isolate payments that where made at weekends and/or bank holidays

Gaps and Duplicates

  • Identify missing cheque numbers
  • Identify missing purchase order numbers
  • Test for duplicate invoice numbers and/or amount
  • Test for duplicate payments to suppliers
  • Test for duplicate creditors by looking for names and address, bank account details, etc.

Matching and Comparing

  • Ensure payments are to valid suppliers
  • Ensure that authorisations limits are approved and authoriser is valid
  • Identify payments to unauthorised suppliers
  • Ensure no payments are made to employees by cross-matching with the payroll database

See Also