What should you know when auditing employee expenses?

1 The expense policy

The expense policy is the set of rules and guidelines that define what expenses are eligible for reimbursement, how they should be reported, and what documentation is required. The expense policy should be clear, consistent, and communicated to all employees. It should also be updated regularly to reflect any changes in the business environment, the tax regulations, or the industry standards. As an auditor, you should be familiar with the expense policy and verify that the expenses submitted by the employees comply with it.

3 The expense audit

The expense audit is the process of examining and verifying the expense reports and the supporting documents. The expense audit can be performed internally by the accounting staff, or externally by a third-party service provider. The expense audit can also be done on a sample basis, or on a full basis, depending on the size, frequency, and risk level of the expenses. As an auditor, you should follow the audit standards and procedures, and document your findings and recommendations. You should also communicate your results and feedback to the employees and the management.

4 The expense software

The expense software is an invaluable tool for employees to create, submit, and track their expense reports, as well as for auditors to review, approve, and audit them. It provides a range of features and benefits, such as automating data entry and calculations, integrating with accounting and payroll systems, providing real-time visibility and reports, enforcing the expense policy and approval workflow, detecting and preventing errors and fraud, and enhancing security and compliance. As an auditor, you should make use of the expense software to streamline your work and increase your efficiency and effectiveness.

5 The expense trends

The expense trends are the patterns and changes in the employee expenses over time, which can provide insights into the company's performance, culture, and strategy. For instance, the expense trends can reveal how the company is managing its costs and revenues, investing in growth and innovation, rewarding and motivating its employees, adapting to the market and customer needs, or facing competition and challenges. As an auditor, it is important to analyze the expense trends to identify any opportunities, risks, or issues that require attention or action.

6 The expense best practices

The expense best practices are the tips and tricks that can help the employees and the auditors to optimize their expense reporting and auditing processes. It is recommended to plan and budget expenses in advance, use the expense software and mobile app, keep receipts and scan them promptly, categorize and describe expenses clearly, submit expense reports on time and follow up on status, review reports carefully and correct any errors, cooperate with auditors and provide necessary information, as well as learn from feedback and improve expense habits. Auditors should also follow these best practices and share them with employees and management.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?