P2P-10

Control Description

Management performs a monthly review of the GR/IR clearing account report to identify, investigate, and resolve aged or unbalanced quantity and value differences between goods receipts and vendor invoices.

Risk

Unresolved differences between what was ordered, received, and billed could accumulate over time, leading to misstated financial records or incorrect expense and inventory balances.

Implementation Details

Implementing the GR/IR review control involves a combination of automated SAP reporting tools, periodic operational cadences, and clear reconciliation workflows:

• F.13 (Automatic GR/IR Clearing): SAP provides automated clearing programs that match up GRs and IRs when quantities and values balance out perfectly. This runs on a recurring batch schedule
• MR11 (GR/IR Clearing Maintenance): Used to clear out historical "orphan" items (e.g., a partial delivery where the remaining quantity will never be delivered or invoiced).
F.19 / Custom Reports: Used to generate the detailed aged GR/IR open-item report for manual review.

Operational Cadence & Responsibility:

• Monthly Reconciliation: Accounting or finance analysts run the GR/IR open items report (F.19) at month-end
• Analysts investigate aged items (e.g., items open > 30, 60, or 90 days depending on company policy). • They check whether a goods receipt was posted in error, whether an invoice is missing, or if a purchase order needs to be closed/adjusted.
• Action & Adjustment: Necessary journal entries, PO adjustments, or manual clearing postings via MR11 are executed.
•Management Sign-off: A finance manager or controller reviews and formally signs off on the final GR/IR reconciliation packet and aging summary.

Test Procedures

Test of Design (TOD)

• Walkthrough & Inquiry: Inquire with the accounting/finance team to understand the end-to-end GR/IR reconciliation process, including which report is run, what aging thresholds trigger investigation (e.g., items over 60 days), and how adjustments are approved.

Test of Operating Effectiveness (TOE)

• Sample Selection: Select a sample of months (e.g., March, June, September, and December) from the audit period.

• Evidence of Review Inspection: For each selected month, inspect the completed GR/IR reconciliation package, including:

◘The generated open-items report / aging schedule.
◘Evidence of review sign-off by management (e.g., digital signature, signed PDF, or approved workflow ticket) showing it was completed timely