Example on how to deal with misstatements or detecting misstatements in an audit ...

The following are very high level examples on how to deal with some misstatements or detecting misstatements in an audit:

• ​Misplaces year-end invoices for raw materials - Audit procedure can be to investigate unmatched receiving reports and internal control can be purchasing department supervisor forwards a monthly listing of matched purchase orders and receiving report. 
• Careless reporting in payables - Audit procedure, select payments and internal control, match to corresponding invoices from the cash disbursement journal and clerk is responsible for matching purchase orders with receiving reports.
• One person approving pay requests and cutting checks - audit procedure, ask to be walked through the invoice payment process and internal control, personnel are assigned different responsibilities each quarter within the department
• Misplacing of receiving reports for purchases of raw materials - audit procedure, identify open purchase orders and vendors' invoices (investigate their disposition) and internal control, supervisor reviews a monthly listing of open purchase orders and vendors' invoices for follow-up 

cc: Audit