PR Sharma & Co. appointed you as an assistant auditor for audit of a business organization. You were asked to prepare internal control questionnaire for audit of payments of the organization

Auditing and Assurance Revision Questions and Answers

Internal control questionnaire for audit of payment is as given below:
1) Are the duties related to payment segregated and rotated periodically?

2) Are the financial powers properly laid down and reasonable?

3) Have the financial powers of various authorities been intimated to various departments?

4) Whether proper and adequate documents are maintained for each payment?

5) Is the arithmetical accuracy, price, quality, timing and other terms and conditions ( of the contract) is ensured before approving a payment?

6) Are payments made through account payee cheques except in exceptional cases?

7) Are bills marked as „paid‟ once the payment has been made? Are there adequate controls to ensure that payment is not made twice against the same bill?

8) Is the person/party, to whom payment is made, properly identified?
9) Is issue of cheque properly controlled? Are all cheques pre numbered? Is each

cheque duly accounted for?
10) Is there a system of sending monthly statement of accounts to suppliers and other parties?

11) Are there adequate controls for safe custody of cheque books?

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