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CS Professional · Internal and Forensic Audit · Special Points relating to Internal Audit in various Entities

Sunrise Hospitals Ltd, a multi-specialty hospital in Pune, wants its internal auditor to check that every service rendered to an in-patient is actually billed. Which audit test is most suited to detect unbilled services (revenue leakage)?

Tracing treatment records, pharmacy issues and diagnostic orders forward to patient bills is the right test, because unbilled services are a completeness issue. Starting from services rendered shows which ones never reached a bill, whereas testing from bills to receipts examines only items already recorded.

  1. ATrace a sample of treatment records, pharmacy issues and diagnostic orders to the final patient billsCorrect
  2. BVouch a sample of final bills back to the cash receipts
  3. CConfirm balances with the hospital's bankers at year end
  4. DCheck the depreciation rate on medical equipment

Explanation

Unbilled services are an completeness risk, so the test must start from the source records of services (treatment sheets, pharmacy issues, lab orders) and trace forward to the bill. Starting from bills and going back to receipts tests only recorded items and cannot reveal omissions.

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