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Internal Audit to Forensic Bend- Business Travel to Personal Trip May 13, 2012

Posted by Khurana Khurana & Associates LLP Chartered Accountants in Forensic Accounting & Auditing.
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Travel and Entertainment expenses is one of the crucial and costlier areas to focus upon, not only in terms of evidences or approvals but also in terms of cost savings to the company.

Travel and Entertainment usually spent by top shots including the client executives or sales development team should not be left unattended during auditing. The travel statements not being settled on time, submitted with lack of supportings and bills, unusual travel expenses are the red flag that one can look for, where money can be siphoned off.

In this fast running business world, the biggest cost of travel and entertainment expense goes towards the flight cost. We did check for the e-tickets stating the destination, amount etc., but did we ever check for the boarding passes? Is it not important to know that the employee has actually travelled or cancelled the ticket and has travelled by a low cost airline? Employees using their personal credit cards to book the flight ticket, generate an e-ticket and invoice from internet and claim the entire flight cost from the company. But who acknowledges that he actually travelled by the same flight or by low cost flight. Did we forgot to check his credit card statement stating that he has got the refund of the costlier flight which he never boarded? How many times the up-gradation charges from Economy class to Business class has been built into the flight cost? Is it worth checking? Yes it will be a saving to the company to spend some time while processing these bills.

Another costlier head goes towards accommodation. Do we enquire enough to track if the room has been booked in double occupancy or the stay has been extended toward weekend even after the conference got over? Does the meal expenses shoots up extra ordinary high due to liquor expenses been built in the same?

Do we realize that a person travelling miles of distance by car and claiming fuel expense instead of easy way of travel by flight or train?

Isn’t it an easier way to make business trip to personal?

So which way you chose to do audit?

A little forensic bend to internal audit, scores to big savings for the company.



Meena Lalchandani Khurana