The audit report serves as a valuable tool for stakeholders, providing insights into the organization’s financial health, compliance status, areas for improvement, and action plans. Neglecting routine AP audits can lead to financial inaccuracies and losses, increased risk of fraud, compliance issues, and inefficiencies, leading to costly implications. Broniec provides recovery audit services to multi-national clients in 36 countries spanning five continents. Our expertise encompasses all industries and is a no-risk solution to assessing your purchase-to-pay process, recovering overpayments, and highlighting root cause analysis. We engage clients and suppliers in a multi-lingual business environment, generating recoveries from over 95 countries year after year. Unlike outdated systems that struggle with rigid integrations, inconsistent purchase order matching, and fragmented workflows, Ramp Bill Pay delivers end-to-end automation that adapts to your needs.

Accounts Payable Internal Control Checklist Summary

The investigation reveals that https://www.bookstime.com/ you processed the original invoice normally through the AP system. However, when the vendor called about a “missing payment,” an accounting clerk manually cut a second check without verifying the payment history. The examination includes checking whether the same person can both authorize payments and access cash, as this combination creates opportunities for unauthorized transactions or embezzlement.

AP Course Audit Step Two: Select a Teacher

Performing an accounts payable audit is crucial to ensure financial accuracy, prevent fraud and maintain regulatory compliance. AP audits verify the legitimacy of invoices, the accuracy of recorded expenses and adherence to payment terms. They uncover discrepancies, unauthorized payments or errors that could impact financial statements. The findings and recommendations from a 2025 AP audit can help a company improve its financial processes and reduce the risk of financial losses due to errors, fraud, or weak process controls. Regularly auditing accounts payable is crucial QuickBooks ProAdvisor to prevent fraud due to the inherent vulnerability of financial processes.

Accounts Payable Audit Software

This may include reviewing policies for cut off tests, unrecorded liabilities and separation of duties. To prepare for an accounts payable audit, AP teams should consider completing the items on this accounts payable audit checklist. Though there’s not a consistent set of standard operating procedures (SOPS) for AP audits, every company typically experiences an accounts payable audit in a series of phases. But even if not required, small and mid-size businesses should regularly audit business finances, particularly accounts payable. Auditing AP annually can also help spot potential trouble spots before they become a more serious issue.

• Duplicate payments can slip through the cracks, especially in large enterprises that handle hundreds or thousands of invoices every month.
• The traditional AP audit procedures have been successful for decades, but modern processes present this approach with some challenges.
• Automation also builds an audit trail that won’t be misplaced or lost, keeping all data in one, protected location.
• Finally, during the next accounts payable audit, it’s important to compare the results from the prior audit to changes made in the AP department.
• Plagued with lost invoices, unpaid bills, and an excessively time-consuming tax audit process, the process became a serious drain on their resources and posed a risk to their financial accuracy and compliance.

Are AP audits mandatory?

The AP turnover ratio is calculated by taking the total purchases made from vendors (i.e. cost of sales) and dividing it by the average accounts payable amount during the same time period. It represents the short-term debt and money owed to suppliers and creditors and indicates the number of vendor invoices that have been recorded (but not yet paid). It should also be noted that if an auditor discovers one or more open invoices for a vendor, they will also contact your business partners. The number and type of vendors that receive these requests can vary depending on the type of business you run. Most auditors will contact regular suppliers and vendors, regardless of whether there is an outstanding balance or not. Finally, you can build compliance rules into the document management software itself.

It involves sifting through stacks of paperwork, expense reports, old receipts, etc. This is especially the case if your business has a high volume of transactions. Auditors will also examine the validity of your accounts payable transactions and procurement process. They will attempt to establish the legitimacy of a transaction by contacting suppliers and vendors for a confirmation request. The method is chosen based on the size and shape of a particular business, as well as the desired thoroughness. Once the planning ap audit phase is complete, the auditor provides an outline of the intended AP audit process.

Important Steps to Prepare for Automation

No longer using paper documentation also means records are easier to track, monitor, measure, and organize, as well as more visible to those in the company and vendors. The audit timeline varies depending on the audit scope, annual vendor spend, availability and quality of data, as well as access to ERP systems and invoice documentation. The value of a Broniec audit is not only in the financial recoveries, but in the root cause analysis, best practices, and process improvement recommendations can help enhance accuracy, efficiency and compliance. Ramp continues to be recognized as one of the easiest AP software offerings to use based on G2 reviews (as of August 2025).

• This may include reviewing policies for cut off tests, unrecorded liabilities and separation of duties.
• Catching duplicate payments early prevents significant financial loss and preserves cash flow.
• To check your endorsed provider, log into your teacher account at the College Board website.
• It should also be noted that if an auditor discovers one or more open invoices for a vendor, they will also contact your business partners.
• Enterprises often work with hundreds of vendors, and managing their payment terms, contracts, and details can be overwhelming without a central system.
• Risks were consistent every year, so audit teams could repeatedly conduct the same audit.

Accounts Payable Internal Audit Checklist – Everything you need to know

The frequency of AP audits can vary based on the organization’s size, complexity and changes impacting the purchase to pay process. With offices across North America, Broniec’s experienced and dedicated auditors are perfectly positioned to deliver on our promise to perform the most comprehensive audits in the industry. This process helps you catch any missing liabilities and provides assurance that your accounts payable balance reflects all outstanding obligations to vendors. Regular AP audits protect your bottom line while building stronger financial foundations that support long-term business growth and stakeholder trust. The key to a successful audit is knowing what exactly auditors are looking for.