Learn how auditors should check telephone expenses to ensure accuracy and compliance. Follow these steps to effectively evaluate and verify expenses during the audit process.
How Auditor Should Check The Telephone Expenses
To vouch the telephone expenses, the auditor should keep in view the following points:-
- TELEPHONE BILL
The auditor should check the telephone bill. The bill must be relate the current year.
- RECEIPTS
The auditor should also check the receipts of telephone bill deposited.
- TELEPHONE NUMBERS
The auditor can also check the telephone numbers. The telephone bills must be related to such numbers.
- REGISTERS OF TELEPHONE CALLS
The auditor should also examine the register of telephone calls. If there are private calls then amount collected must be deposited with the cashier.
Auditing telephone expenses involves several steps to ensure the charges are accurate and justified. Here’s a general outline of how an auditor might check telephone expenses:
- Obtain Telephone Expense Records: The auditor should collect all records related to telephone expenses. This includes bills, invoices, contracts with telephone service providers, and payment receipts. If the company uses digital communication platforms that incur charges, those should also be reviewed.
- Verify Contracts and Agreements: The auditor should review the contracts with telephone service providers to understand the terms, rates, and conditions agreed upon. This includes checking for any special provisions like international calling plans or discounts.
- Match Bills to Contracts: The charges on the bills should be matched against the contract terms to ensure they align. This involves checking the rates charged per call, data usage fees, monthly rental or service fees, and any additional charges or taxes.
- Analyze Usage Patterns: Review the call logs and data usage to identify any unusual or non-business related activity. The auditor can analyze trends over several months to spot inconsistencies or sudden spikes in usage.
- Check Authorization and Approval Processes: Ensure that there are proper authorization procedures for adding new services or making changes to the existing plans. The auditor should verify that any increase in telephone expenses is duly approved by management.
- Compare to Previous Periods: Comparing current expenses to previous periods can help identify anomalies or trends. It also helps in understanding whether the telephone expenses are growing in line with business needs.
- Sample Testing: Select a sample of telephone bills to conduct a detailed review. This includes verifying the accuracy of the billing details, checking for any unauthorized services, and ensuring compliance with the company’s internal policies.
- Interview Relevant Personnel: Talking to employees who manage the telephone expenses or use the services extensively can provide insights into any issues or procedural lapses.
- Recommend Improvements: If the auditor finds any inefficiencies or areas where costs could be reduced (such as switching plans or providers, negotiating better rates, or eliminating unnecessary services), they should recommend these to management.
- Prepare Audit Report: The auditor should document all findings, supporting evidence, and recommendations in a detailed audit report. This report is then presented to management for review and action.
These steps help ensure that the company’s telephone expenses are legitimate, necessary, and optimized for business needs.
Conclusion:
In conclusion, checking telephone expenses is a critical aspect of the audit process, and auditors must approach this task with diligence and attention to detail. By thoroughly reviewing documentation, analyzing usage patterns, performing cost-benefit analysis, verifying allocations, and ensuring compliance with policies, auditors can effectively assess the accuracy and reasonableness of telephone expenses. By following these steps, auditors can provide valuable insights to stakeholders and help ensure the financial integrity of the organization.