Requiring the matching of a purchase order (PO), receiving report, and invoice before payment is a robust control designed to prevent overpayment and other types of fraudulent activities related to vendor payments. This control ensures that:
The goods or services invoiced were actually ordered (verified by the purchase order).
The goods or services were received (verified by the receiving report).
The invoice amount matches the agreed-upon terms and quantities (verified by the invoice).
This three-way match process helps prevent discrepancies such as overpayments, duplicate payments, or payments for goods/services not received. By ensuring all three documents align, it mitigates the risk of fraud and errors in vendor payments.
The Institute of Internal Auditors (IIA) Standards and Practice Advisories.
COSO Internal Control – Integrated Framework, specifically on control activities.
" Internal Auditing: Assurance & Advisory Services " by IIA, Chapter on Procurement and Accounts Payable Controls.
