# VENDOR CREDIT MEMO INTEGRITY AUDIT ## 1. EXECUTIVE AUDIT SUMMARY Supplier: Northstar Packaging Ltd. Audit period: October 2026 Currency: USD Overall verdict: FAIL A $300 supplier credit was applied twice to the same invoice through two distinct effective ledger postings. The duplicate application violates the mandatory single-application control. ## 2. EVIDENCE AND POLICY MATRIX - Policy VC-101: Each authorized credit may be financially applied only once up to its approved value. - Invoice INV-101: Original liability $1,200. - Credit CM-101: Authorized amount $300; linked to INV-101. - Ledger entries AP-11 and AP-12: Each posted an effective $300 credit application. - Payment PAY-101: Confirmed $600. - Evidence status: Sufficient to establish duplicate posting. ## 3. CREDIT MEMO RECONCILIATION TABLE Credit ID: CM-101 Invoice ID: INV-101 Authorized credit: $300 Effective applications: $600 Valid applicable amount: $300 Remaining legitimate credit: $0 Excess application: $300 Status: CONFIRMED VIOLATION Expected invoice balance: $1,200 - $300 - $600 = $300 Recorded invoice balance: $1,200 - $600 - $600 = $0 Confirmed understatement of payable: $300. ## 4. DUPLICATION AND CONTROL FINDINGS Finding F-01 — Duplicate effective credit posting Severity: High Evidence: AP-11 and AP-12 have separate posting IDs, both effective, each for $300. Violation: Credit CM-101 was financially applied beyond its authorized value. No reversal is documented. ## 5. FINANCIAL EXPOSURE ANALYSIS Confirmed excess credit application: $300. Confirmed payable understatement: $300. These describe the same underlying discrepancy and must not be added together. Non-overlapping confirmed discrepancy: $300. ## 6. CORRECTIVE ACTION PLAN Priority 1: Investigate and reverse the unsupported duplicate application, subject to approval. Owner: Accounts Payable. Priority 2: Reconcile the corrected invoice balance with the supplier. Owner: AP Reconciliation. Priority 3: Implement a unique credit memo application control. Owner: Finance Systems. No corrective posting is assumed completed. ## 7. FINAL AUDIT VERDICT FAIL Two distinct effective postings establish that the same $300 credit was applied twice. The mandatory control was violated, and the invoice payable is understated by $300. The finding is supported by transaction-level evidence.