64.2 One internal control deficiency 3 marker trade payables

Question 1

The audit documentation in relation to trade payables notes that Billywig did not perform any
supplier statement reconciliations during the year.

Answer 1

No supplier statement reconciliation were performed during the year

Consequences
The absence of any supplier statement reconciliations may result in unrecorded invoices. This
could lead to the late payment of invoices, resulting in:
* penalties or loss of prompt payment discounts
* accounts put on stop
* poor relationships with suppliers.
Billywig may pay its suppliers twice in error or errors in suppliers’ invoices may go undetected.
This will have an adverse impact on cash flow and profits.

Recommendations
Supplier statement reconciliations should be completed once a month by a member of staff
not responsible for the purchase ledger.
Any discrepancies identified should be followed up and resolved.
Reconciliations should be reviewed by the financial controller on a timely basis and evidenced
as reviewed.