Accounts receivable and payable management audit program

In times like the present when resources are limited, financial auditing does not satisfy the needs of the top management of Cuban companies and executives need more complete information that can be used in future decision-making. Aspects that lead to thinking about the benefits of the Management Audit, which will not only provide a comprehensive evaluation of the performance of their activity, but will also allow them to achieve a higher order, leading them successfully towards the proposed goals.

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The Management Audit is a path rarely explored in our country, that is why today more than ever it constitutes a vitally important tool to materialize the planned socioeconomic development, so that efficiency, effectiveness and economy are essential in companies, generating in them a healthy dynamism.

The comprehensive evaluation achieved in a Management Audit constitutes a novel vision for the generality of Cuban administrations and the methods and techniques that must be developed to obtain objective results are in an incipient stage of development.

Among the methods to be developed, the creation of a program that serves as a guide to the audit and can facilitate the self-evaluation of the company for making more accurate decisions can be considered very useful, which is why this program can constitute an instrument of work.

In the Villa Clara Industrial Production Company, located in the city of Santa Clara, despite having an internal auditor in charge of carrying out systematic reviews and other control mechanisms aimed at the most sensitive activities, it has not been possible to cover all areas risks of the organization, resulting in insufficient supervision actions that are executed. In addition, the entity only performs the analysis of the age of balances provided by the accounting system itself, which is not capable of providing an effective evaluation of the management of collections and payments.

For this reason, the main objective of this research is to gather all the practical theoretical elements for the preparation and correct implementation of a Management Audit Program to evaluate the accounts receivable and accounts payable of the Base Business Unit Specialized Workshops and teams of the Villa Clara Industrial Production Company; This program is also applicable to all units of the company.

The foregoing characterizes the problematic situation that originated this investigation, from which the following scientific problem arises: The entity does not have an Audit Program that allows an effective evaluation of the management of collections and payments.

Based on the scientific problem to be solved, the research hypothesis is designed: If an Audit Program is developed to evaluate the result of the management of collections and payments, the entity will have an effective evaluation that allows improving the management of its accounts receivable and your accounts payable.

To corroborate the hypothesis, the following system of objectives is proposed:

General Objective:

Prepare and apply an Audit Program to evaluate the management of collections and payments in the UEB Specialized Workshops and Equipment of the Villa Clara Industrial Production Company.

Specific Objectives:

1. Prepare the theoretical framework of the investigation Characterize the unit Evaluate the internal control system of accounts receivable and accounts payable Design a program that allows evaluating the management of collections and payments.

• Audit overview

There are several definitions of auditing provided by scholars of the subject, among which are:

Holmes: “… the audit is the examination of administrative records and demonstrations. The auditor observes the accuracy, completeness and authenticity of such statements, records and documents. "

Alberto Veres Basanta: “… the audit is the part or branch of accounting that deals with the review, verification, presentation and presentation of the economic facts of any type of organization through the study, examination and analysis of accounting books, receipts and other evidence. "

Furthermore, Resolution 44/90 of the Ministry of Audit and Control (MAC) states: “the audit constitutes one of the fundamental forms of control of administrative management and consists of examining the accounting and financial operations and the application of the corresponding administrative and legal provisions, in order to improve control and the degree of efficiency in the use of resources, prevent their use, strengthen the discipline of said entities and contribute to the improvement of administrative honesty and the preservation of the moral integrity of the workers. "

There are many other audit concepts in the different bibliographies that cover this topic, but it can be affirmed that the audit is the activity by which the accounting correctness of the Financial Statements figures is verified; the veracity and reliability of the same; that the figures recorded as inventories correspond to reality, having followed a uniform valuation and registration system with respect to previous years; that Generally Accepted Accounting Principles are not violated and that all established laws and regulations are strictly adhered to. In this way, it helps entities not to have deficiencies in any of their areas.

The objective of the audit is to support the members of the company in the performance of their activities. For this, the audit provides them with analysis, evaluations, recommendations, advice and information regarding the reviewed activities.

1.2. The Management Audit. Objectives and Components.

The Management Audit arises from the need for the development itself, which demands an increasing level of management, to guarantee the quality and safety of the economic-financial activity of the entities.

Today, there is a growing need to examine and assess the quality of managers and the processes by which an organization operates. Through the Management Audit, the problems that hinder operational development and hinder the growth of the company can be known. It is important to assess the importance of problems, find their causes and propose appropriate solutions and implement them.

Globalization is increasingly forcing to evaluate not only the internal factors of companies, but also the external ones: economic, political, commercial, environmental factors, etc., by which they are affected. This analysis and evaluation of both internal and external factors must be done in a systematic and comprehensive manner, covering the entire company if the organization is to truly improve.

In Cuba, the Management Audit began to boom at the beginning of the 90s as a result of social development, technological advancement and productive practice, which contributes to the opening of our relations towards a world until that moment little explored in the country and in which it has become necessary to act.

Different authors and scholars of the audit have made their own definition of Management Audit, such is the case of Eduardo Hevia Vázquez who defines it as: “an examination carried out by auditors and according to the techniques and methods of auditing the whole or part of the areas, functions or activities of an organization, checking the efficiency and adequacy of its internal control system. "

JA Fernández Arena maintains that it is the objective, methodical and complete review of the satisfaction of the institutional objectives, based on the hierarchical levels of the company, in terms of its structure, and the individual participation of the members of the institution.

According to the different resolutions and documents issued by the MAC and the Ministry of Finance and Prices (MFP) such as Decree Law 159/1995 and Resolution 26 of the year 2006 of the MAC, the Management or Operational Audit is defined as: "The examination and evaluation carried out to an entity to establish the degree of economy, efficiencies and effectiveness in planning, control and use of resources and to verify compliance with the pertinent provisions, with the aim of verifying the most rational use of resources and improving the activities and subjects examined. "

It should be taken into account that the Management Audit does not constitute a simple economic analysis of the entity, but responds to a much more in-depth examination by not limiting itself only to showing figures or explanations. This must check each element and expose wasteful, inefficient and ineffective practices, detailing the causes and conditions that cause them and the effect they produce, that is, the price of non-compliance. Likewise, the interrelation of the three elements (economy, efficiency, effectiveness) in relation to the planning, control and use of all the entity's resources must be taken into account. In addition, the Management Audit makes alternatives for improvement proposals that benefit the entity.

Among the main objectives of the Management Audit we can point out the following:

1. Evaluate compliance with the goals and results indicated in the different programs, projects or operations of the bodies subject to control Establish whether the entity acquires, allocates, protects and uses its resources efficiently and economically Determine if the entity, program or project has complied with applicable laws and regulations Detect and warn of uneconomic, inefficient and ineffective practices Establish the effectiveness of the entity's controls over activities and operations to fulfill its purposes.

The Management Audit comprises the following components:

Effectiveness Efficiency

Financial Economics

Quality Compliance

Equity Impact

Effectiveness: Refers to the degree to which a government entity, program or project achieves its objectives and goals or other benefits that were intended to be achieved, provided for in the legislation or set by another authority.

Economy: The economy is related to the terms and conditions under which entities acquire resources, be they financial, human, physical or technological (Computerized Information System), obtaining the required quantity at a reasonable level of quality, at the time and place appropriate and at the lowest possible cost.

Efficiency: Efficiency refers to the relationship between the goods or services produced or delivered and the resources used for that purpose (productivity), compared to an established performance standard.

Financial: The financial component is essential to have adequate accounting and appropriate procedures for the preparation of financial reports. In a Management Audit, the financial component may constitute only one element to be considered in the evaluation of other areas in the examined entity.

Compliance: Generally executed with the financial component. Compliance refers to the submission of public officials to applicable laws and regulations, internal policies and procedures.

Equity: Analyzes the distribution of financial resources against the different productive factors necessary for the provision of the good or service.

Quality: It is the parameter that allows measuring the degree of user satisfaction with the products or services received. The concept of quality determined the definition of policies, guidelines, standards and administrative and control processes.

Impact: These are the changes that are observed in the target population and its context during and after a project, program or activity. Social intervention produces a set of modifications (economic, social, political, cultural, etc.), both in the sectors that are part of it, and in the context where said intervention takes place. It is the highest level of result or the ultimate purpose of the maturation cycle of a project, program or activity when it generates all of the expected benefits in its operation.

The term "Management Audit" is the most appropriate word that more closely reflects the results that are estimated to be obtained from this wide-ranging examination; whose approach exceeds the strictly financial framework, when evaluating operations (efficiency and economy), the achievement of established objectives, goals and controls.

• Stages for conducting the Management Audit.

According to the Manual Center for Accounting, Financial and Insurance Studies (CECOFIS) for its organization and development, the Management Audit comprises five general stages, which are the following:

1. Exploration and preliminary examination Planning Execution Report Follow-up

Exploration and preliminary examination.

The exploration and preliminary examination stage constitutes a guide for the subsequent work, thus facilitating determining fundamental questions such as: towards which area the work is directed, how many people are needed, time, that is, creating the conditions that allow establishing the elements of quality control.

This is the study that, prior to the execution of the audit, must be carried out in the entity. A tour of the areas that make up the entity in order to observe the operation as a whole. Review the information in the single file that contains the results of audits, inspections, checks and fiscal verifications. Evaluate the internal accounting, financial and administrative control system, as well as carry out interviews that are considered necessary with leaders, technicians, workers and members of political and mass organizations.

The planning of the audit refers to the determination of the objectives and scope of the audit, the time required, the criteria, the methodology to be applied and the definition of the resources that are considered necessary to guarantee that the examination covers the most important activities. important aspects of the entity, the systems and their corresponding key controls.

Execution.

The execution stage involves the collection of documents, tests and analysis of evidence, to ensure its sufficiency, competence and relevance, in order to accumulate them for the formulation of observations, conclusions and recommendations, as well as to certify having carried out the examination in accordance with the quality standards established in this manual. At this stage it is necessary to obtain sufficient, competent and relevant evidence.

In addition, pay special attention that the audit serves as an instrument to assist in making smart and timely decisions.

The work of specialists who are not auditors must be carried out on the basis of the objectives defined in the planning; the group leader should be in charge of the orientation and review of the work; the work must be adequately supervised by a specialist from the audit unit; determine in detail the degree of compliance with the three "E", taking into account: condition, criteria, effect and cause.

Report.

The presentation of the audit report must express in a concrete, clear and simple way the problems, their causes and effects, with a view to assuming it by the entity's executives as a management tool. Notwithstanding the above, the following should be considered:

Introduction: The objectives that will be presented in this segment will be the specific ones that were defined in the second stage (planning).

Conclusions: The price of non-compliance, that is, the economic effect of inefficiencies, wasteful practices and deficiencies in general, should be presented in summary. The causes and conditions that affected the degree of compliance with the three “E” and their interrelation will be reflected, also in a summarized way.

Body of the Report: Make an assessment of the effectiveness of current regulations. Anything that is quantifiable must be quantified.

Recommendations: These should be general and constructive, not committing the audit to future situations that may occur in the entity.

Annexes: The items that make up the price of non-compliance (material damages and economic losses) can be shown in a summarized way, as well as a summary of responsibilities.

Synthesis: Sometimes it is necessary to make a summary which will reflect the most relevant findings in a pleasant, open, precise and concise way that motivates the reading.

Tracing.

It is advisable, according to the degree of deterioration of the three "E" that is observed, to carry out a check between one and two years that allows to know to what extent the administration was receptive to the findings shown and the recommendations given in any of the circumstances, that is, whether the administration of the entity was kept in the hands of the same personnel, or whether it had been replaced due to its mistakes. In general, it consists of the monitoring and verification of the implementation of the corrective measures formulated in the recommendations or the improvement plan, if applicable.

1.3. Bill. Generalities.

It has been confirmed that accounting is a science, having control over each of the company's transactions allows its proper compliance.

The account is nothing more than an accounting means or operating instrument through which assets, liabilities and capital can be subdivided, and grouped according to certain affinity characteristics and which allows graphing all the increases and decreases that occur in the various elements of the accounting equation.

The real accounts represent the assets, rights and obligations of the company, that is, they are made up of assets, liabilities and capital. They are called real accounts because the balance of these accounts represents what a company has at any given time, that is, what it owns, what it owes and what can be bought for the good or for the existing document, that's why some authors point to them as palpable accounts. It has the characteristic of being permanent accounts, that is, its balance is transferred from one year to another. These accounts make up the financial statement known as the balance sheet.

Asset account: it is represented by all the assets and rights that the company owns, which can be converted into money or consumed in the next normal cycle of the company's operations (generally one year is taken as the basis).

Current assets include accounts that represent securities that can be converted into cash over time (cash, accounts receivable, inventories).

The American Institute of Public Accountants states: The term current assets is used to consign cash or other items of assets or resources identified as those that are expected, reasonably to be converted into cash or sold or consumed in the normal cycle of operations.

Each credit negotiation includes at least two parties, the creditor who sells the service or product and obtains items receivable, and the debtor who makes the purchase and creates an item payable.

A receivable occurs when a business or person sells goods or services to a second business or person on credit. A receivable is the right that the seller has over the buyer for the amount of the operation.

Liability account: it is represented by all the debts and obligations of various kinds, contracted by the company with third parties and also those services that it must provide for charges that it has received in advance on account of future benefits.

Current liabilities: this group includes all those accounts that reflect debts or obligations that the company must cancel in the next normal cycle of operations (generally one year is taken as the basis). Within the current liabilities, the accounts should be placed, attending firstly the time in which the debt must be paid and secondly the importance that the liability represents for the company.

Liabilities are debts, all companies have liabilities, the liability that arises from the purchase of goods or services on credit (term) is called “accounts payable”, and the person or firm to whom it is owed is called creditor, the way in which a debt is represented.

1.3.1. Accounts Receivable .

The account receivable is an asset, a promise to receive cash from customers to whom the business has sold merchandise. It is represented by ordinary unsecured commercial documents (invoices) and which represent rights of the company over third parties, generally they come from sales to loans made by the company.

Sales on credit, which result in accounts receivable, typically include credit terms that stipulate payment within a specified number of days. Although it is known that all accounts receivable are not collected within the credit period, it is true that most of them are converted into cash in a period much less than a year; consequently, accounts receivable are considered part of the company's current assets, which is why a great deal of attention is paid to their efficient administration.

In order to retain current customers and attract new customers, most companies turn to offering credit. Credit conditions may vary depending on the type of company and the branch in which it operates, but entities in the same branch generally offer similar credit conditions.

The objective pursued with respect to the management of accounts receivable should not only be to collect them promptly, but also pay attention to the cost-benefit alternatives that are presented in the different fields of their management. These fields include the determination of credit policies such as: credit analysis, credit conditions and collection policies.

For the analysis and review of accounts receivable, a representative sample of clients of no less than 10% of the total must be selected, depending on the reliability of internal control; giving priority in the selection to contracts for occasional clients, for sales of products or services of fundamental activity and some with canceled invoices or collections already made.

• Review the custody and file of the commercial bank invoice model and its consecutive numbering, as well as the canceled invoices and define the cause of their cancellation. In the case of invoicing through an automated system, at least verify the consecutive and the established cancellation mechanism. Make confirmation of charges with selected clients, including balances and details of the items or products, as established in the current legislation. Sales returns are duly approved by the authorized authority and the final destination of the returned products. Check that the anticipated charges are duly controlled and supported by the corresponding documents, as well as their aging and causes.Review the custody and correct filing of customer files and the documentary evidence of the collection efforts made. Verify the treatment of shortages, losses and surpluses, in accordance with current legislation.

To perform the Management Audit analysis of the collections, the following steps are followed:

1. Evaluate internal control, the age of accounts and principal debtors Perform the first analysis Calculate the turnover of accounts receivable, the collection cycle and the cost of current accounts receivable Make a proposal to increase the turnover of accounts receivable Calculate the collection cycle with the proposed turnover and the decrease in cost due to the increase in the proposed turnover Show in a table the calculated indicators

1.3.2. Debts to pay.

Accounts payable are debts contracted by the company when buying goods on credit, this account is generally covered by an invoice, which must generally be paid within a year.

Accounts payable arise from operations to purchase tangible goods (inventories), services received, expenses incurred and the acquisition of fixed assets or the contracting of investments in process.

If they are payable in less than twelve months, they are recorded as short-term accounts payable and if their maturity is more than twelve months, in long-term accounts payable.

These liabilities must be analyzed for each creditor and in each of them for each source document (date, document number and amount) and for each payment made. They should also be analyzed by age to avoid payment of arrears or compensation.

Long-term accounts payable at the end of each economic period must be reclassified to short-term (those due next year).

The Collection and Payment System, as it has been called in our country, is the denomination by which the set of instruments or means, institutions, procedures and communication and information systems that are established to organize the execution of collections is defined internationally. and payments between legal and natural persons, derived from the purchase and sale of merchandise and services and to carry out the transfers of the corresponding financial resources between the interested parties, mainly through their bank accounts.

It significantly affects the efficiency of the monetary policy established or to be established, so its modifications, practices and concepts must be identified with the short and medium term objectives of said policy.

The collection and payment instruments have different forms, modalities and possibilities of use.

In our country for temporary reasons, in which the material restrictions of recent years had no small influence, starting in 1997, when the first "rules for the control of purchases and sales of goods and services and their charges were issued. and payments ”, the“ check ”was ratified as a fundamental instrument to make the payment of commercial transactions.

For the analysis and review of accounts payable, a representative sample of suppliers of no less than 10% of the total must be selected, depending on the reliability of internal control; giving priority in the selection of eventual suppliers, purchase of products or services for the fundamental activity and payments already made.

• Confirm payments with selected suppliers, as established in current legislation Check if purchases of merchandise from suppliers are authorized in accordance with current legislation and the contracts signed between the parties Check the correct custody and filing of the Vendor records Verify that the balances shown by accounts payable are duly supported by commercial invoices actually received from the vendor Verify that advance payments are properly controlled, reconciled and supported by the corresponding documents, as well as their aging and causes Verify the use and destinations of bank credits approved to the entity Verify the treatment of shortages, losses and surpluses in accordance with current legislation.Verify if the entity makes payments on behalf of third parties, if so, the auditor must request the corresponding documentation that supports the use of this mechanism.

To perform the Management Audit analysis of payments, the following steps are followed:

1. Evaluate internal control Request the list of accounts payable that must be classified by age and present their balance Calculate the rotation of suppliers and the average payment period Search the accounts payable file.

2.1. Characterization of the Villa Clara Industrial Production Company.

The Villa Clara Industrial Production Company was founded in 1976 with the name of Prefabricated Production Company No-4. Throughout these years our work has been aimed at the production of prefabricated elements of massive concrete, reinforced, prestressed and post-tensioned, of numerous construction systems such as: Girón, Sandino, Agropecuario, SAE, Roof and mezzanine, Electrical networks and Atypical elements for tourism and other sectors.

The maximum volumes of concrete produced were 56,000 m3 per year in the 1980s, a value that is currently not maintained due to changes in our environment, decreasing to a level of 24,000 m3 of concrete per year. To guarantee our production, we have all the technology installed for these construction systems and a workforce made up of 37 professionals, 51 medium technicians and qualified personnel in the different stages of the production process.

During these 31 years of work, the prefabricated elements of several complex works have been made, such as: “Carlos Marx” Cement Factory, expansion of the Mechanical Plant, Polygraphic, Monument of the “Armored Train”, Ernesto Che Guevara Square, Pedraplen de Caibarién - Cayo Santa María, Canal Alacranes - Pavón.

It has also contributed to the social development of the territory through the prefabrication of basic secondary schools, hospitals, hotels, refrigerators, day care centers, etc. Our productions have also been present in other provinces such as Havana City, Cienfuegos, Matanzas, Sancti Spiritus Ciego de Ávila and Havana province.

At present our work is aimed at the development of the tourist center of Caibarién, as well as the works of the Battle of Ideas and Reinforcement Task.

Mission

“Provide prefabricated, alternative and metallic elements; to meet the needs of customers in variety, aesthetics and quality. "

• Professionalism: Quality of the person to carry out their activities with relevant capacity and application.- Have full knowledge and skills regarding their activity. - Act with ethics.Consecration: Dedication to work.-Unconditionality and discipline in the fulfillment of the work.-Be examples before the group.-Spare no effort before the performance of the work that we carry out.Rapidity: Willingness to fulfill the task with agility and efficiency in the agreed time-Use the essential time in the execution of the activities-Perform to the maximum Efficiency: Achieve the objectives set with lower cost, higher quality and customer satisfaction. -Have responsibility in the daily work. -Fulfill the term-cost-quality premise.-Responding with our individual work for the fulfillment of the mission-vision objectives of the Company.

Future values

Sense of belonging. Responsibility, unconditional, loyalty, personal commitment. Competitiveness Professionalism, speed, ethics and quality

Customer orientation, teamwork, competitiveness, efficiency and effectiveness.

UEB Workshops and Specialized Teams

The application of the improvement in the company brought with it significant changes in its organizational structure, among them the creation in its place of the UEB Talleres y Equipos Especializadas de Santa Clara designed in a flexible way, being able to fragment or group according to the size of the manufacturing, presents autonomy, adaptability, mobility and fast movement.

By creating the UEB Specialized Workshops and Teams, better planning, organization and control of the services to be provided is achieved.

Your mission is:

Offer mechanized support services, supported by a Quality Management System and the strengthening of the Business Management and Direction System with a strong influence of profitability, seriousness and responsibility of human capital.

Its corporate purpose is:

Provide rental, repair, maintenance, sheet metal, painting and punching additive services to automotive transportation equipment, cargo transportation equipment in general.

Specific Functions of the UEB Specialized Teams and Workshops.

• Guarantee the general and medium repair of the transport equipment, engineering machines and light of the entire company Manufacture and recover spare parts for the supplies of these repairs Transport the engineering machines that need this means for their movement.

2.2. Evaluation of Internal Control.

The entity's internal control can be classified as acceptable as it guarantees compliance with its objectives. The five components of internal control are present and working in the entity.

• There is a control committee As part of the actions for the implementation of the internal control management system, a systematic dissemination program was developed in murals and morning sessions to influence the tasks of the personnel regarding the control of their activities and achieve a conscious participation of the The rules and procedures established by the governing bodies were updated for the better functioning of the entity An internal control guide was prepared that is applied to the different areas and throughout the unit There are organizational manuals such as the manual accounting, internal control, financial administration, human resources and computer security. The entity's staff is suitable. The work contents have been prepared.

The entity has identified risks:

Risk Identification	Cause causing the Risk	Measures to counteract the Risk
Unreasonable accounting and poor internal accounting control.	Ignorance of accounting rules and procedures. Unsuitable accounting technicians. Poor application of self-controls.	Collectively study the rules and procedures. Need for training in accounting areas and report it to Human Resources.
Theft or loss of cash.	Improper transportation of cash. That the box is not in a safe place.	Move the cash in a suitable vehicle, with custodian and take security measures. Grating the place where the unit box is located.

Loss of check stubs.	Not keeping check stubs locked up.	Keep check stubs under lock and key.
Non-demonstrable operations.	Lack of control in files or records due to lack of definition of the responsibility for their custody.	Issue a certificate of responsibility for the custody of the documents.
Deviation of the means of standard rotation, basic means, or tools and tools.	Violation of the accounting procedures established for the control of these media.	Ensure compliance with the monthly 10% count and that deep inventories are made of the means in existence.
Impact on accounting and internal control.	Lack of rules and procedures	Deliver the rules and procedures to all accounting staff.
Affecting the accounting systems carried on the PC.	Operating the computerized system by unauthorized personnel.	Ensure compliance with computer security and equipment protection.
Lack of a location for the passive file.	Not being able to file documents from previous years in a safe place.	Request the authorization of a premises with sufficient security to store documents from previous years.
Information insecurity and possible loss of data in the control of Tangible Fixed Assets.	Damaged and obsolete computer programs from Activa. Fixed Tangible (AFT).	Implement AFT computerized programs in the entity. Replace the old program.
Accounting and financial operations without documentary support.	Proof of operations without the corresponding documentary support.	Guarantee that each operation has its support (certifications of works, invoices, checks, payroll, exit vouchers, receipt report, notice, debit and credit, etc.).
Have accounts receivable or payable out of term.	Lack of reconciliation of accounts receivable or payable. Lack of financial resources to be able to buy or pay for merchandise necessary for the development of this activity.	Make a conciliation act with customers and suppliers for possible solutions.
Lack of models.	Not being able to process the raw data.	Coordinate with the UEB of services the need for models.

Control Activities:

The control activities carried out by the company to fulfill the assigned functions on a daily basis are the following:

• This entity makes the strategic projection and work objectives for the year. It controls the budget of income and expenses. Financial statements and the main economic indicators are analyzed. The control committee controls the different areas. Information and Communication: The communication system is adequate. There is a plan for the flow of internal and external information to send and receive.

Supervision or Monitoring of Activities:

• A supervision schedule was prepared for the different areas of the unit (including the workshops); The result of the supervisions or self-controls is reflected in a report which is discussed in the UEB's management, at which a plan of measures is drawn up and its compliance is monitored. The self-checks are carried out monthly. To carry out the inspections or supervisions the entity has the following guide:

For accounts receivable:

1. Updated subgrowers of accounts receivable and accounting balance at the end of the month. Invoices pending collection due. Reconciliation of invoices with more than 30 days and clients' payment commitments. Square accounts receivable files with the closing submajor, with the collected stamp and the check number.

For accounts payable:

1. Updated accounts payable sub-ledgers and accounting balance at the end of the month. Accounts payable files squared with the sub-ledger, with the paid stamp and check number. Payments in 30 days to the main suppliers.

2.2.1. Evaluation of the Internal Control of Accounts Receivable.

To evaluate the internal control of accounts receivable, a questionnaire was used based on Resolution 297/03 of the MFP and Resolution 26 of the MAC, adapting them to the entity's conditions. In addition, an analysis by age was carried out, choosing the month of February in the years 2007 and 2008 to establish a comparison.

QUESTIONNAIRE	ACCORDING AUDIT	OBSERVATIONS
YES	NO
1. Blank models of invoices and purchase orders for services are controlled in the economic area by a person other than those who make them.	x
2. There is separation of functions between the warehouse employee who carries out the goods receipt, the one who prepares the invoice, the one who records the operation and the one who makes the payment.	x
3. The balances showing the accounts receivable are supported by the invoices sent to the client.	x
4. Accounts Receivable from Customers, Miscellaneous and Advance Payments are analyzed by: Customers, Invoice, Collection made and Ages.	x
5. Records of customer collections are prepared, containing each invoice issued and the check as well as the accepted claims.	x

QUESTIONNAIRE	ACCORDING AUDIT	OBSERVATIONS
YES	NO
6. The client files are in custody and on file, as well as the documentary evidence of the collection procedures.	x
7. The invoices issued correspond to the services received by the client.	x
8. There is documentary evidence of reconciliations with clients, as well as with accounting records.	x
9. They timely register the invoices, whose shipments are authorized by the authorized authority.	x
10. Said records are made in numerical order.	x
11. There is confirmation of collections with customers.	x
Responsible of the area: ____________________	Firm:__________
Auditor:_____________________	Firm:__________ Date:__________

Taking into account the results achieved with the application of the questionnaire, the internal control is evaluated as acceptable.

When analyzing the Statement of Collections by Ages, it was found that:

• Short-term accounts receivable (account 135) are within 30 days in both years, the balances being $ 78,374.08 in 2008 and $ 471.22 in 2009, showing a decrease in customers this year compared to the previous year. accounts receivable in litigation (account 347) improved from one year to the next not only in balances (2008 $ 105,049.98; 2009 $ 160.93), but from the point of view of analysis by age, since in 2008 they presented accounts that were older than of 90 days while at present only up to 30 days, the decrease in the number of clients being significant.

The foregoing responds to the following policy drawn up by the entity:

Any company that contracts an obligation with it, must pay within the established period, otherwise it will assume, in addition to the account to be paid, all associated expenses.

In order not to have losses due to accounts receivable, the unit proceeds as follows:

• If within 30 days the client has not paid the invoice, a reconciliation is made and the client's willingness to pay is recognized so that he or she commits to pay, then the debt is transferred from short-term accounts receivable to accounts receivable In litigation, if the agreed deadline is not met, the judicial process is opened.

2.2.2. Evaluation of the Internal Control of Accounts Payable.

To evaluate the internal control of the accounts payable of UEB Talleres y Equipos Especializadas, a questionnaire was used based on Resolution 297/03 of the MFP and Resolution 26 of the MAC, adapting them to the entity's conditions. In addition, an analysis by age was carried out, choosing the month of February in 2008 and 2009 to establish a comparison.

QUESTIONNAIRE	ACCORDING AUDIT	OBSERVATIONS
YES	NO
1. The functions of: Reception in the warehouse are separated; Payment authorization; Check signing for payment	x
2. The amounts received and those pending payment are periodically reconciled according to accounting controls with those of the suppliers.	x

3. Payment records are prepared by providers containing each invoice, receipt report and the check or payment reference, and invoices with the stamp of "Paid" are canceled.	x
4. There is confirmation of payments with selected suppliers as established in current legislation.	x
5. The submainings of accounts payable to suppliers are kept up to date, and do not present aging balances.			Submajor daily, presenting aged balances.
6. Accounts payable to suppliers are broken down by each invoice received and each payment made, as well as by age.	x
7. Provider files are properly guarded and filed.	x
8. It is verified on a monthly basis that the sum of the balances of all the sub-majors of the accounts payable matches those of the corresponding control accounts.	x
9. There is documentary evidence of reconciliations with suppliers, as well as with the accounting records.	x
10. Advance Payments are duly controlled and supported by the corresponding documents.	x
11. The balances shown by accounts payable are duly supported by the commercial invoices actually received from the supplier.	x
Responsible of the area: ____________________	Firm:__________
Auditor:_____________________	Firm:__________ Date:__________

Taking into account the results achieved with the application of the questionnaire, the internal control is evaluated as acceptable.

When analyzing the Status of Payments by Age, it was found that:

• Accounts payable (account 410) in terms of balances decreased from one year to another (year 2008 $ 432 711.98; year 2009 $ 116 708.35); However, something positive to note is that in 2009 the number of providers increased and there were only 2 accounts aged from 31 to 60 days, while in 2008 there were 4 accounts aged in the same period.

2.3. Audit program for the collection cycle.

The steps and procedures of the audit program for the Collection Cycle based on Resolution 26 of 2006 of the Ministry of Audit and Control are listed below.

1. Prepare an analysis of the balances of the subaccounts and reconcile with the balances reported in the corresponding section of the Balance Sheet. Check the causes of the differences detected and their impact on the reasonableness of the financial information. Request a report of the accounts by age included in the collection cycle Check that the transactions or balances reported by debtor and type of currency are duly covered by: a) Contracts or purchase-sale agreements that contain at least the following data:

• Quantity, assortment, quality, prices or unit rates of the merchandise Forms or instruments of payment The procedures to follow in case of differences in quantity or quality in the agreed upon Interest rate applied for the commercial credit granted to the client in accordance with current legislation.

1. b) The corresponding commercial invoices. The data must be reconciled with those provided for in the contract signed between the parties, such as: quantity, prices or unit rates of merchandise, amount and authorized persons c) The purchase or service request submitted by the customer d) Amortization schedule of the principal plus the interests of the loan granted in accordance with current legislation Verify that the balances related to the accounts of the Loan Debt or of the body or agency are real and are covered by the corresponding documents Verify that the balances by debtor in the Various accounts receivable are covered by the corresponding documentation in accordance with current legislation.Review the reasonableness of the data reported by the accounts receivable in dispute through the reconciliation with the legal documents. Review that the corresponding files have been instructed and the cases related to: a) Accounting errors from previous years, whose solution have been recorded. implies positive or negative effects on the result of the entity b) Differences that are detected in the process of updating or cleaning the accounting, whose solution causes positive or negative effects on the result c) Amounts not received from accounts receivable originated by lack of merchandise on delivery d) Cancellation of accounts receivable for being considered uncollectible even when the provision has been established to finance these losses.Verify that the records that support the transactions or balances at closing or during the audit period include: a) The name of the customer (s) b) The reasons for which the collection was not made c) The steps taken for the Request the authorization of the Ministry of Finance and Prices to create the provision for uncollectible accounts and confirm that the provisions therein are met Evaluate the appropriate presentation and disclosure of the balances reported in the financial statements of the accounts included in the Collection Cycle based on the criteria of relative importance and probable risks associated with the errors, irregularities or fraud verified and expressed in the adjustment and reclassification entries proposed by the auditor.Assess compliance with the accounting policies established in the entity for the treatment of the causes analyzed in the Collection Cycle.

The steps and procedures of the audit program for the Payment Cycle based on Resolution 26 of 2006 of the Ministry of Audit and Control are listed below.

1. Prepare an analysis of the balances of the subaccounts and reconcile with the balances reported in the corresponding section of the Balance Sheet. Check the causes of the differences detected and their impact on the reasonableness of the financial information Check that the transactions or balances reported by debtor and type of currency are duly covered by: a) The purchase or service request presented to the supplier.) The reception reports and the corresponding commercial invoices. The data must be reconciled with those provided for in the contract between the parties, such as: quantity, prices or unit rates of merchandise, amount and authorized persons. C) Contracts or purchase-sale agreements that contain at least the following data:

• Quantity, assortment, quality, prices or unit rates of the merchandise Forms or instruments of payment The procedures to follow in case of differences in quantity or quality in the agreed upon Interest rate applied for the commercial credit granted to the client in accordance with current legislation.

1. Verify that the balances related to the Budget Obligation accounts or those of the body or agency are real and are covered by the corresponding documents Check that the balances per creditor in the various accounts payable are covered in the corresponding documentation in accordance with the current legislation Check that the corresponding files have been instructed and the cases related to: a) Accounting errors from previous years, whose solution implies positive or negative effects on the entity's results, b) Differences that are detected in the updating process or purification of the accounting, the solution of which causes positive or negative effects on the result c) Cancellation of accounts payable originated by the non-existence of the debt,according to the certification to that effect issued by the supplier Verify that the records that support the transactions or balances at closing or during the audit period include: a) The name of the customer (s) b) The reasons why it was not carried out the payment c) The supplier's certifications of the non-existence of the debt d) Total amount to be paid Evaluate the appropriate presentation and disclosure of the balances reported in the financial statements of the accounts included in the Payment Cycle based on the criteria of relative importance and probable risks associated with the errors, irregularities or fraud verified and expressed in the adjustment and reclassification entries proposed by the auditor.Assess compliance with the accounting policies established in the entity for the treatment of the causes analyzed in the Payment Cycle.

3.1. Implementation of the Audit Program for the collection cycle.

Previously, an Audit Program was proposed to verify the behavior of collections in the company, which is based on the steps and procedures for the collection cycle given by Resolution 26/06 issued by the Ministry of Audit and Control. In this section, we will proceed to the implementation of each of the steps contained in this program.

1. The analysis of the balances of the accounts receivable was carried out and they were reconciled with the balances reported in the corresponding section of the balance sheet without detecting differences between them, and a request was made to report the accounts by age included in the collection cycle. was able to verify that the transactions by debtor and type of currency are duly covered by: a) The agreements or sales agreements:

The UEB Talleres y Equipos Especializadas only carries out scrubbing and greasing agreements, the rest are made by the company, which sends documents that prove the operation. 100% of the agreements for the month of February were reviewed, checking that they contain:

• The entity to which it belongs, license plate, vehicle brand, amount. The forms or instruments of payment are as follows: the customer must pay by check and the service provider in this case, will make a monthly reconciliation with the customer issuing an invoice In this regard, there is a quality clause in the agreement that explains which are the ISOs that govern the quality of the service provided. When a parameter of this type fails, it is processed with the quality manager. The entity does not apply interest as long as the client pays in the established time, otherwise the late payment surcharge (% that is set in the contract) is applied.

1. b) 100% of the commercial invoices were reviewed and the data were reconciled with those provided for in the agreement signed between the parties, verifying their coincidence c) There is a request for the scrubbing and greasing service submitted by the client in the entity. The rest are processed through the company d) In the UEB no loans are made, this is done at the company level It was found that the balance related to the Debt with the Budget account is zero since the unit transfers this balance to the company which is in charge of carrying out the corresponding operation. In the UEB there are no diverse accounts receivable, they are taken at the company level. The accounts receivable in dispute for the month of February have already been canceled (collected). In the entity it has been necessary to open files related to the following situations:a) Accounting errors from previous years whose solution implies positive or negative effects on the entity's results. Supplies and tools were incorrectly taken to expenses, this error was fixed in the balance sheet. B) The accounting was purged for what was explained in the previous paragraph. C) Amounts not received from accounts receivable originated by missing goods in delivery. Not applicable in the entity d) Cancellation of accounts receivable for being considered uncollectible even when the provision has been established to finance these losses. It does not exist in the UEB. It was possible to verify that in the client files that support the balances at closing or during the audit period, they present: a) The name of the clients b) The reasons for which the collection was not made. This was due to invoices received in the last days of the month.c) The steps they carry out for collection in these cases are reconciliations and then the lawsuit.The company has no provision for bad debts or authorization to create it.No case of accounts receivable lost or presenting probable associated risks was detected to errors, irregularities or fraud. The entity has no defined risks for accounts receivable. The entity complies with the accounting policies that it has established for the collection cycle.The entity has no defined risks for accounts receivable. The entity complies with the accounting policies that it has established for the collection cycle.The entity has no defined risks for accounts receivable. The entity complies with the accounting policies that it has established for the collection cycle.

3.2. Indicators for the analysis of accounts receivable.

The following indicators of accounts receivable were calculated for the month of February 2008 (annexes 5 and 6) and for 2009 (annexes 3 and 4):

1. Turnover of Accounts Receivable.

Sales / Accounts Receivable Audit Date

1. Collection Cycle.

30 Days / Accounts Receivable Rotation

1. Cost of Current Accounts Receivable.

Total Cost / Turnover of accounts receivable.

Turnover of Accounts Receivable Year 2008 Year 2009

294 182.96 / 78 374.08 = 3.75

515 / 471.22 = 1.09

Collection Cycle

30 / 3.75 = 8

30 / 1.09 = 27.52

Cost of Current Accounts Receivable

473 729.00 / 3.75 = 126 327.73

177 329.76 / 1.09 = 162 687.85

3.3. Implementation of the Audit Program for the payment cycle.

In the previous chapter, an Audit Program was proposed to verify the behavior of payments in the company, which is based on the steps and procedures for the payment cycle given by Resolution 26/06 issued by the Ministry of Audit and Control. In this section we will proceed to the implementation of each of the steps contained in this program.

1. The analysis of the balances of the accounts payable was carried out and they were reconciled with the balances reported in the corresponding section of the balance without detecting differences between them and a request was made to report the accounts by age included in the payment cycle. was able to verify that transactions by debtor and type of currency are duly protected by: a) The entity makes the purchase request to the company, it gives its consent and is in charge of entering into the contract with the supplier. b) The 100 was reviewed % of reception reports and commercial invoices and the data were not reconciled with those provided for in the contract signed between the parties to verify their coincidence because the contracts are made by the EPI. c) The contracts could not be viewed of purchase and sale for what was explained in the previous paragraph.It was found that the balance related to the Budget Obligations accounts is zero since the unit transfers this balance to the company which is in charge of making the contributions. It was found that the various accounts payable in the entity only integrate it unclaimed wages and in the month of February did present a balance (per worker not per creditor) In the entity it has not been necessary to open files related to the following situations: a) Accounting errors from previous years whose solution implies positive or negative effects to the result of the entity. b) Differences detected in the process of updating or cleaning the accounting, whose solution causes positive or negative effects on the result.It was possible to verify that in the files that support the balances at the closing or during the audit period, they present: a) The name of the suppliers b) The reasons for which the payment was not made c) The certification of the supplier of the non-existence of the debt. Not applicable in UEB d) Total amount to be paid. Not applicable at the entity No case of accounts payable lost or presenting probable risks associated with errors, irregularities or fraud was detected. The entity does not have defined risks for accounts payable. The entity complies with the accounting policies established by the payment cycle.d) Total amount to be paid. Not applicable at the entity No case of accounts payable lost or presenting probable risks associated with errors, irregularities or fraud was detected. The entity does not have defined risks for accounts payable. The entity complies with the accounting policies established by the payment cycle.d) Total amount to be paid. Not applicable at the entity No case of accounts payable lost or presenting probable risks associated with errors, irregularities or fraud was detected. The entity does not have defined risks for accounts payable. The entity complies with the accounting policies established by the payment cycle.

3.4. Indicators for the analysis of accounts payable.

The following indicators for accounts payable were calculated for the month of February 2008 (annexes 6 and 8) and for 2009 (annexes 4 and 7):

1. Rotation of Suppliers.

Purchases / Accounts payable audit date

1. Average Payment Period.

30 Days / Accounts Payable Turnover

Turnover of Suppliers Year 2008 Year 2009

384 914.95 / 432 711.98 = 0.89

226 733.49 / 116 708.35 = 1.94

Average Payment Period

30 / 0.89 = 33.7

30 / 1.94 = 15.46

Audit report.

Audited unit: UEB Workshops and Specialized Teams. (EPI Villa Clara)

Type of audit: Management audit.

Start date: November 4, 2009.

Completion date: November 20, 2009.

Introduction

The UEB Talleres y Equipos Especializadas provides rental, repair, maintenance, sheet metal work, painting and punch addition services to automotive, construction, general and specialized cargo transportation equipment in addition to providing fuel storage services to the National Institute of the State Reserve.

The objective of the audit was to evaluate the degree of economy, efficiency and effectiveness in the management of accounts receivable and accounts payable. To do this, samples were taken from the operations of February 2008 and 2009. The program created in this regard was used in the execution of the audit, observing the rules and other regulations in force for this activity.

Development

The entity in 2008 made sales for a value of $ 294 182.96 while in 2009 it reached sales of $ 515.21, this circumstantial decrease was the result of the independence of the Electromechanical Workshop, this being its main source of income.

When applying the Audit Program for the collection cycle, it was found that the entity only carries out the scrubbing and greasing agreements, the rest are made by the company; that does not make loans; that the balance related to the Debt with the Budget account is zero since the unit transfers this balance to the EPI which is in charge of carrying out the corresponding operation; that there are no diverse accounts receivable since they are carried at the company level; that supplies and tools were incorrectly taken to expenses, debugging the accounting, this error that was fixed in the balance; It should also be noted that the UEB does not have defined risks for accounts receivable.

The Audit Program applied for the payment cycle showed that the entity does not have the purchase requests presented to the suppliers because the company is in charge of making the contract with them; that the balance related to the Budget Obligations accounts is zero since it is transferred to EPI Villa Clara, which is in charge of making the contributions; that the various accounts payable in February presented balances and they are made up only of unclaimed wages and that the entity has no identified risks for accounts payable.

When carrying out the analysis of the indicators related to accounts receivable, the conclusion is reached that the entity decreased its turnover from one period to another by 2.66 times. This decrease has caused the collection cycle to increase by approximately 20 days, which shows that the management of this activity has suffered a breakdown; influencing that the cost of accounts receivable will increase by $ 36,360.12.

The analysis of the indicators of accounts payable shows that their turnover increased in 2009 compared to 2008 by 1.05 times, which caused a favorable decrease in the average payment period of approximately 19 days.

Conclusions

According to the verifications carried out that cover the audit objectives and the results of the checks carried out, it was possible to show that the work carried out in the process of evaluating accounts receivable and accounts payable shows that the appreciated state of internal control Accounting is acceptable considering the general compliance with the established provisions, in addition the balance of these accounts reasonably express the economic facts of the entity.

At present the entity's payment management is much more effective than the collection management; causing a misuse of their financial resources to disburse before entering, greatly affecting the economy of it.

Despite the entity being within the 30-day period in which the accounts receivable remain pending, the collection management is ineffective, as there was a considerable increase in the cycle this year, reaching approximately 28 days.

In this way, it can be said that the entity has lost quality in an activity as important as collection management, so it is not economical and since its effectiveness is affected, it is not efficient.

Conclusions.

1. The Management Audit constitutes a working tool that allows the administration to identify its strengths and weaknesses by functional areas. The Management Audit provides management with high-quality information that can be used in future decision-making. Obtained in the Management Audit constitutes valuable information for the administration and its proper use guarantees the effectiveness in obtaining the resources, the efficiency in its use and the effectiveness in its orientation.The designed program constitutes a work tool for the auditor Internal control shows weaknesses in the following aspects:

• Some of the defined risks are actually causes or both are combined.Evaluate the risks and rank them by relevance taking into account severity and frequency.

1. When applying the Audit Program for collections and payments in UEB Talleres y Equipos Especializadas it was found that:
   • The appraised state of internal accounting control is acceptable, considering the general compliance with the established provisions. The balance of these accounts reasonably express the economic facts of the entity.

• Payment management is more effective than collections management. The collection cycle from one year to another increased by approximately 20 days. The average payment period in 2009 decreased by 18 days compared to 2008.

• The entity has lost quality in an activity as important as collection management, so it is not economic, and since its effectiveness is affected, it is not efficient.

recommendations

1. Extending the Audit Program to all units of the company, as well as to its management Periodically applying the main indicators related to collections and payments, in order to evaluate the management of said activities Limiting the service to those clients that delay payment or become delinquent Reduce the collection cycle, drawing up policies or seeking strategies that require timely payment from clients, in order to improve the management of this activity Review the process of determining and assessing risks taking into account the deficiencies found.

Bibliography.

1. Cook JW and Winkle JM Audit. Volume II Accounting. Volume I. Decree Law No. 159 of the Audit. ONA Edition. Havana, 1995.Ladino, Enrique. Internal control. COSO Report Maldonado R. General Accounting Manual of Accounting, Financial and Insurance Studies Centers. "Stages of the Management Audit." Padrón Ramírez, María del Carmen. “Audit Program to evaluate management in the financial area.” Resolution 297/03 of the MFP. Resolution 026/06 of the MAC. "Methodological Guide for the Management Audit." Economic Resolution of the Fifth Congress of the Communist Party (1997). Ribas de las Casas, Catalina. Monograph Internet sites:

www.gestiopolis.com/finanzas-contaduria/programa_de_auditoría_para_gestion_

www.monografias.com

www.wikilearning.com/monografia/del_control_interno_a_la_economia_empresarial

1. You see Basanta, Alberto. Audit.

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