Auditing Credit Card Statements

I have a construction client that puts $100k+/mo on company credit cards. They bundle hundreds of receipts and expense reports that support items on the statement. Each expense is not really "approved" formally and the documentation is smattered with various job codes here and there. G&A accounts are rarely coded, which is perplexing.

About 20 employees have cards on the account.
Materiality is about $50,000.

How would you approach auditing this area?

Sampling would probably be the way to go. Pick a random month and audit a single month. That's what EDD does when they do a payroll audit and what my former CPA firm did when they were auditing this type of thing.

Agreed.

Sampling would probably be the way to go. Pick a random month and audit a single month. That's what EDD does when they do a payroll audit and what my former CPA firm did when they were auditing this type of thing.

Thanks. This is basically what is being done.

Step 1. Sample one month. Conclusion: documentation stinks, expand sample.
Step 2. Sample two more months. Conclusion: documentation still stinks.
Step 3. Document material weakness in mgt/gov letter using strong professional wording.

Despite the time spent and steps taken, I can't help but feel I haven't audited anything. All I can conclude is that internal controls in this area is very bad and communicate such information to management and governance.

Is there a better way?

I can't help but feel I haven't audited anything. All I can conclude is that internal controls in this area is very bad and communicate such information to management and governance.

Is there a better way?

If you feel the internal controls are really that bad, perhaps you will be forced to give a qualified opinion. If that doesn't get their attention, then nothing will. However, keeping an audit client that can't get their act together might not be worth it.