Audit Walkthrough Working-Paper Example

Audit Walkthrough Working Paper Example

This example illustrates a practical Audit Walkthrough Working Paper used to evaluate whether a control is properly designed and implemented.

GENERAL INFORMATION
Working Paper Reference	IC-WT-001
Audit Area	Procurement and Accounts Payable Process
Objective	To understand the end-to-end procurement process and evaluate whether key controls are adequately designed and implemented.
Process Owner	Procurement Manager
Walkthrough Date	15 May 2026
Auditor	Internal Audit Department

1. Process Description

The procurement process begins when a department identifies a purchasing need and submits a Purchase Requisition (PR). The Procurement Department reviews the request, obtains quotations from vendors, prepares a Purchase Order (PO), and obtains approval according to the authorization matrix. Goods are received by the Warehouse Department and documented through a Goods Receipt Note (GRN). The supplier invoice is matched against the PO and GRN before payment is processed by Finance.

2. Walkthrough Procedures Performed

1. Interviewed Procurement Manager regarding procurement procedures.
2. Obtained and reviewed procurement policy and authorization matrix.
3. Selected one procurement transaction and traced it from initiation to payment.
4. Inspected supporting documents.
5. Observed actual system processing and approval workflow.
6. Verified segregation of duties among requester, approver, receiver, and payer.

3. Sample Selected

Transaction Number	PO-2026-00457
Vendor	ABC Industrial Supplies
Purchase Amount	USD 12,500
Transaction Date	10 May 2026

4. Walkthrough Testing Details

Process Step	Document Reviewed	Observation	Control Identified	Result
Purchase Requisition Creation	PR-2026-0089	PR was prepared by Production Department and submitted through ERP system.	Only authorized employees may create purchase requisitions.	Control observed and operating as designed.
Purchase Order Approval	PO-2026-00457	PO approval was electronically completed by Procurement Manager and Finance Manager.	PO above USD 10,000 requires dual approval.	Control observed and operating as designed.
Goods Receipt	GRN-2026-0031	Warehouse personnel confirmed receipt and quantity of goods.	Goods received must be independently verified.	Control observed and operating as designed.
Three-Way Matching	PO, GRN, Supplier Invoice	Finance performed three-way matching before payment authorization.	Invoice payment cannot proceed without successful matching.	Control observed and operating as designed.
Payment Processing	PV-2026-0014	Payment approved by Finance Manager and processed by Treasury Officer.	Segregation of duties between approval and payment execution.	Control observed and operating as designed.

5. Design Effectiveness Assessment

Conclusion:
The procurement process contains appropriate preventive and detective controls to address key risks related to unauthorized purchases, incorrect receipt of goods, and improper payments.

Design Effectiveness Rating: Effective

6. Implementation Assessment

Evidence indicates that controls have been implemented and are operating within the process.

Implementation Rating: Implemented

7. Issues Identified

No significant design deficiencies identified during walkthrough.

8. Conclusion

Based on the walkthrough performed, the procurement process appears to be properly designed and implemented. The identified controls are suitable for mitigating key procurement and payment risks. The process is ready for subsequent operating effectiveness testing.

Prepared By _____________________

Reviewed By _____________________

Date _____________________