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Question 5. The close of the year 2017 witnessed the eruption of an imprompt public uproar...

Question 5.
The close of the year 2017 witnessed the eruption of an imprompt public uproar regarding the procurement of 42 fire tenders at a total cost of $42 million. What is your role as an auditor and give a detailed discourse on how you would audit such a purchase?

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Answer #1

Ans 5. The auditor should check the following points:

a. Whether or not the purchase was sanctioned by the appropriate authority following the proper procedure.

b. Whether there were advertisement inviting quotations.

c. Whether the adequate no of parties submitted their quotations.

d. Was the purchase order was issued to the lowest bidder after price negotiations and proper inspection of the techninal parameters.

e. Whether the technical parameters were specified and the technical parameters of the purchased equipments actually meets those specified parmeters.

f. Whether payments are being made as per terms and conditions of the purchase order.

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