QUESTION $3$

$15$ marks

The chief audit executive $($CAE$)$ decided that, while you are busy assisting the procurement department, you may as well perform the assurance audit of the procurement function originally scheduled for later in the year.

After identifying the risks, you have compiled the following audit objectives to include in your audit programme.

I. Validity: To ensure that only valid purchases are recorded.

II$.$ Completeness: To ensure that all the goods received from suppliers are recorded as purchases in the purchase journal.

III. Valuation: To ensure that the liability in respect of credit purchases is recorded at the correct value.

IV$.$ Cut$-$off: To ensure that purchases accounted for in the current period relate only to goods received in the current period.

$3\mathrm{.}1$ List six $(6)$ planning steps you would need to undertake to properly plan the internal audit of the procurement cycle.

$3\mathrm{.}2$ Describe two $(2)$ audit procedures for each of the audit objectives identified.