Accounts Payable Audit Checklist

Use this as a working document or plugin template. Each item should be marked: [ Completed] [ Issue Found] [- N/A]

1. Master Vendor File Review

• Duplicate vendors removed or merged
• Vendor details match tax records (name, VAT, address)
• Bank details verified and approved
• Inactive vendors deactivated
• Changes to vendor info logged with user and timestamp

2. Invoice Validation

• All invoices have valid PO numbers (if required)
• Invoice amounts match POs and receipts
• No duplicate invoice numbers across vendor accounts
• Invoice date is within accounting period
• Invoices have appropriate approvals and documentation

3. Payment Review

• All payments match approved invoices
• No early payments without valid reason
• No overpayments (invoice total = payment amount)
• No duplicate payments
• Payment method recorded (BACS, CHAPS, cheque, etc.)

4. Reconciliations

• AP ledger matches general ledger (GL)
• Bank reconciliation matches payment batches
• Credit notes properly applied or recorded

5. Fraud Checks

• Spot check for ghost vendors (i.e., no goods delivered)
• Manual invoices cross-checked with delivery logs
• Vendor bank details haven't been recently changed without approval
• Check for frequent round-number invoices or same-day approvals

6. Reporting & Controls

• Monthly AP aging report reviewed
• High-risk vendors flagged
• Exception reports generated and resolved
• Staff permissions reviewed (who can approve/pay)
• Audit trail enabled and tested

Workflow: Accounts Payable Audit Process

This can be automated or carried out manually depending on your setup.

1. Define Audit Scope

   • Period: Last 3/6/12 months
   • Vendors: All / high-risk / random sample

2. Extract Data

   • Pull vendor master file, invoice history, payment logs, and AP ledger

3. Run Automated Checks (where possible)

   • Duplicate invoices
   • Invoice vs PO vs payment match
   • Date and value anomalies
   • Unapplied credits

4. Manual Spot Checks

   • Select 5-10 invoices per auditor
   • Cross-check against delivery logs, approval chain, and bank statement

5. Document Issues

   • Classify: Error / Policy Violation / Potential Fraud
   • Assign: Fix owner, due date

6. Generate Audit Report

   • Summary of findings
   • Corrective actions
   • Recommendations for process improvement

7. Implement Fixes

   • Block vendors, recover funds, retrain staff
   • Update internal policy or plugin logic

8. Follow-Up

   • Review fix implementation in 30 days
   • Schedule next audit (quarterly, semi-annually)