ICAP's Audit Practice Manual
ICAP's Audit Practice Manual
(Revised)
Volume 2
Audit Practice Manual – Revised
CONTENTS
PLANNING PHASE 8
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IV Others 295
(a) WWF / WPPF 296
(b) Laws and Regulations 298
24. Leads 303
25. Leads Schedule 304
26. Format of Confirmation 305
I Bank Confirmation 305
II Debtors / Creditor Confirmation 309
III Lease Confirmation 310
IV Legal Confirmation 311
V Loan Confirmation 312
VI Tax Confirmation 313
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Acceptance and Retention of Client –
New Client Evaluation
Purpose
The purpose of the prospective client acceptance memorandum is to assess whether the client is
one with which the auditor wishes to associate and to document a consideration of the issues
influencing the decision to accept or reject an invitation to act as auditor. The prospective client
evaluation process seeks to determine this through an examination of the professional risk that
may result from providing services to a client. The evaluation also seeks to identify higher-risk
clients.
This memorandum should be filled and signed before accepting all new audit engagement.
n What has been auditor’s experience with the client or member of the same group?
n What is the business reputation of the prospective client, its owners, and its
management?
n What is known about the integrity of the principal owners and management ?
n What is the financial status of the prospective client (particularly liquidity and
viability)?
n What is known about the industry in which the prospective client operates and the
risks it presents?
n Has the auditor contacted the predecessor auditor for information including any
reason for the change?
iv. Auditor’s association with the prospective client (consider following questions)
n Are there any relationship that may impair auditor’s objectivity or ability to meet
any relevant independence requirements?
n Are there any potential conflict of interest affecting auditor’s ability to accept the
engagement?
n Does the auditor has sufficient information about the client’s expectations form
the engagement?
n Are the relevant skills to carry out the work available with the auditor?
1. Conflicts of interest
2. Expertise
Enter details of the skills and experience the auditor has that makes it a suitable
for this client.
3. Fee recovery
Enter details of estimated fees, and confirm that an acceptable level of recovery is
expected.
4. Other services
Comment on the potential for providing other services to the client and suggest
actions for taking advantage of these.
Specify the areas of concern that the client presents and explain how the risk will be
managed.
Document the results of enquiries with predecessor auditor and comment on the same.
vii. Other
viii. Conclusion
On the basis of the above, we conclude that there is no reason to believe that the overall
level of risk associated with__________________________-is sufficient to prevent the
client from being accepted and there are no other circumstances of which we are aware
associated with __________ _________________that suggest that the client should not
be accepted.
Signed
Instructions
This section has to be completed by the engagement partner. However, the engagement partner
may delegate some of the evaluation procedures to other partner or professional staff. In case of
“yes” attach details.
3. Is there any new legal, regulatory or professional requirements that alter the
reporting responsibilities and the nature, timing or extent of the audit
procedures? Yes/No
2. Would the member or representative firm's association with the client be likely
to affect the firm's image adversely either currently or in the future? Yes/No
3. Are there any features of the business generally or the way the particular client
operates which present unacceptable professional risks or call for special
attention if the engagement is continued? Yes/No
Conclusion
I believe the firm should / should not continue our client engagement and I have considered all the factors
mentioned.
PLANNING PHASE
Suggested Engagement Letter
Addressee (To the Board of Director or appropriate
Senior Management Person)
Date
Dear Sir
You have requested that we audit the financial statement of ________ comprising of balance
sheet as at ________, and the related profit and loss account, cash flow statement and statement
of changes in equity for the year then ending together with the notes forming part thereof. We
are pleased to confirm our acceptance and our understanding of this engagement by means of
this letter. Our audit will be made with the objective of our expressing an opinion on the
financial statements.
At the outset you agree that the responsibility for the preparation of financial statements
including adequate disclosure is that of the management of the company. This includes the
maintenance of adequate accounting records and internal controls, the selection and application
of accounting policies, and the safeguarding of the assets of the company. Our responsibility is
to express an opinion on these financial statements based on our audit.
We will conduct our audit in accordance with International Standards on Auditing as applicable
in Pakistan with the objective of expressing an opinion whether the financial statements conform
with approved accounting standards as applicable in Pakistan, and, give the information required
by the Companies Ordinance, 1984, in the manner so required and respectively give a true and
fair view of the state of the Corporation’s affairs as at ------ and of the profit, its cash flows and
changes in equity for the year then ended. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation.
Because of the test nature and other inherent limitations of an audit, together with the inherent
limitations of any accounting and internal control system, there is an unavoidable risk that even
some material misstatements may remain undiscovered.
In addition to our report on the financial statements, we expect to provide you with a separate
letter concerning any material weaknesses in accounting and internal control systems, which
come to our notice during the course of our normal audit work. We are not required by auditing
standards to make an examination of internal controls beyond that which we make in
determining the nature, extent and timing of our other audit procedures, and we have not been
engaged to report on the company's internal control structure. As part of our audit process, we
As part of our audit, we are also required by the Companies Ordinance, 1984 to form our opinion
on whether:
a) proper books of account have been kept by the company as required by the Companies
Ordinance, 1984;
b) the balance sheet and profit and loss account together with the notes thereon have been
drawn up in conformity with the Companies Ordinance, 1984 and are in agreement with
the books of account and are further in accordance with accounting policies consistently
applied;
c) the expenditure incurred during the year was for the purpose of the company’s business;
d) the business conducted, investments made and the expenditure incurred during the year were
in accordance with the objects of the company; and
e) zakat deductible at source under the Zakat and Ushr Ordinance, 1980, was deducted by the
company and deposited in the Central Zakat Fund established under section 7 of that
Ordinance.
n it acknowledges its responsibility for the implementation and operations of accounting and
internal control systems that are designed to prevent and detect fraud and error,
n it has disclosed to us all significant facts relating to any frauds or suspected frauds known to
management that may have affected the entity, and
n it has disclosed to us the results of its assessments of the risk that the financial statements
may be materially misstated as a result of fraud.
These specific items will be included in our request for written confirmation concerning
representations made to us in connection with the audit. In addition to the above management
also is responsible for identifying and ensuring that the Company complies with laws and
regulations applicable to its activities.
If you require us to complete our work under this engagement contract or, any part of it, by a
specific date or time, you will inform us in writing of your requirement. Whilst we will make
every effort to complete such work by the date specified, you acknowledge that meeting any
such requirement will rely on you providing reasonable notice of your requirement and the
timely provision of such information, as we may need to complete the work concerned.
We agree that we will treat as such all confidential proprietary information obtained from you
and will not disclosed such information to others, except to those persons engaged in providing
services to you, or use such information except in connection with the performance of the
services agreed to this letter. This undertaking shall not apply to any of the information that we
are required by law or by the requirements of any regulators or by specific professional standards
to disclose, that is in, or hereafter enters the public domain. We wish to inform you that our
working papers files for the audit of the financial statements of your company would be subject
to review by the Institute of Chartered Accountants of Pakistan’s Quality Control Review
Committee without any further reference to you.
We look forward to full cooperation with your staff and we trust that they will make available to
us whatever records; documentation and other information including minutes of all management,
board of directors, committees and shareholders’ meetings are requested in connection with our
audit. We shall request sight of all documents or statements, including the Chairman’s statement
and director’s report (if any) required to be issued with the financial statements.
Our fees, which will be billed as work progresses, are based on the time required by the
individuals assigned to the engagement plus out-of-pocket expenses. Individual hourly rates vary
according to the degree of responsibility involved and the experience and skill required.
This letter will be effective for future years unless it is terminated, amended or superseded.
Unless we hear from you to the contrary, we will assume your concurrence with the contents of
this letter.
Please sign and return the attached copy to indicate that it is in accordance with your
understanding of the audit arrangements.
Yours truly
Firm’s Name
Purpose
The purpose of this working paper is to obtain an understanding of the entity’s business. It
documents:
n the entity’s objectives, strategies and the components of its business (i.e., markets,
products/services, customers, alliances)
n the entity’s relevant external business drivers (i.e., general business environment, specific
industry characteristics and management’s response to the expectations of significant
constituencies).
n how the entity formulates and implements its objectives and strategies (strategic
management process)
n the business control environment management has created to support its objectives and
strategies
n how computer information systems facilitate business processes and are utilised by the
entity
n Logistical plan
This understanding will assist in understanding business risks that threaten the entity’s
objectives. Such as understanding should be reviewed with the entity’s management.
I Client Overview
(a) Client History and Background
Provide a description of relevant client background
1.
2.
3.
Entity Competitors
Strengths
n n
n n
Weaknesses
n n
n n
Opportunities
n n
n n
Threats
n n
n n
n significant stakeholders.
General business environment and specific industry characteristics (PEST and Porter’s
Five Forces)
Provide a discussion of current forces facing the client that may have an impact on the
client achieving its objectives and the relevance of those aspects of the environment to the
client, given its chosen strategies. Consider the following forces in analysing the general
business environment and specific industry characteristics
1. Political
2. Economic
3. Social
4. Technological
Significant Constituencies
Management may have incentives to manipulate the results of the business and the
impression given by the financial statements considering significant stakeholders.
Provide a discussion of individual stakeholders that management perceives as
significant and discuss how management responds to expectations of significant
stakeholders.
When analysing the client’s strategic management process understand how management:
n monitors the external environment and assesses the strategic implications of potential
opportunities and threats;
n allocates resources, including capital, people and facilities to its business processes;
n business structure;
n remuneration management;
n personnel profiles;
n communication of information;
n control environment
Business structure
Remuneration management
Personnel profiles
Communication of information
Control Environment
n level of dependence the client has on computer information systems (include a list
of the client’s computer information systems);
n accounting policies applied by the entity and applied within the industry;
Critical audit areas are generally those where judgment is involved and significant
estimation is used. The approach to those areas and resulting impact on the
financial statements relating to the audit is documented. It also includes
consideration of previous years brought forward issues. Following are some of the
critical areas for only guidance purposes. Other critical areas may be included in
this section as per the auditor's assessment.
V of Receivables
VP of Investments
CEA of Taxation
VP of Defined
benefit plans
VP of Litigation &
Claims
V of Inventories
V Impairment of
assets
Description iclude a summary of the issue, why it is considered significant and its
potential financial statement effects. Depending on the phase of the audit workflow in
which the issue is identified, the financial statement assertion to which the issue relates
may or may not have been combined into an audit objective yet. As a result, the issue
may be included as a significant issue on the basis that the potential financial statement
effect may be a significant non-routine transaction, requires a great deal of judgement or
is complex, and not necessarily that it has been confirmed as a critical audit objective.
[Description]
Findings
[Description]
Findings
Involvement of: Other specialist or other party involved in the audit e.g.Actuary,
Valuers, Internal audit, Co-auditor
[Description]
Findings
n Recompute gain/loss on
disposals.
n Check/recalculate
depreciation charge.
n Check impairment.
n Circularise direct
confirmations.
n Check disclosure.
n Obtain reconciliation
statements.
n Circularise direct
confirmations to legal
advisors.
n Circularise direct
confirmations.
n Check disclosure.
n Vouch payments.
n Ensure classification in
appropriate heads
n Ensure calculation of
overhead on reasonable basis
X Logistical plan
Engagement team
Engagement Partner
Engagement Manager
Job-in-Charge
Team members
Chief Executive
Finance Director/CFO
Manager Finance
Factory Manager
Sales Manager
Activity Date
Confirmation circularisation
Manager review
Partner review
Reportings/ deliverables:
Location of client:
Telephone:
Fax:
Email:
Web site:
XI Management Span
Board of Directors
(BOD)
President and
Chief Executive
GM GM Credit HR
IT Financial
Centralised Card Execut-
Executive Controller
Operations Operations ive
Whereas planning materiality is primarily concerned with the judgments of the auditor,
reporting materiality is primarily concerned with the auditor's evaluation of the judgments of
users of financial statements.
In the client acceptance stage the auditor evaluates whether, if the client is accepted or retained,
the audit risk (the risk of a material misstatement in the audited financial statements) can be
reduced to an acceptable level. In this, the initial audit stage, "a material misstatement" refers to
the level of reporting materiality. Similarly in the final opinion formulation stage, the auditor
evaluates the likelihood of the audited financial statements containing a material misstatement.
Again, this evaluation is based on the level of reporting materiality.
Where an entity's results are expected to be "normal", then reporting materiality is based on
after tax income amounts. However, where the entity incurs losses, has potential going concern
problems or the results are in other ways unusual, materiality may be based on one or more of
the other factors referred to above. For example, if the entity is incurring losses, both before and
after tax, the auditor may use total assets or total revenue, whichever is the greater. The final
assessment of reporting materiality is subjective and depends on the auditor's perception of, for
example, what information is relevant, who the users of the financial statements are, what
decisions the users may make and what would influence those decisions.
Note that financial statements may be materially misstated as a result of either a quantitative
misstatement (in relation to its monetary value) or a qualitative misstatement (in relation to its
accuracy of presentation, disclosure, description).
Client:
Period:
I Introduction
Documentation may be included in this working paper, or other working papers (with
cross-reference to the Control Overview and Risk Assessment Document).
II Risk
Audit risk means the risk that the auditor gives an inappropriate audit opinion when the
financial statements are materially misstated.
Control risk is the risk that a misstatement, that could occur in an account balance or class
of transactions and that could be material individually or when aggregated with
misstatements in other balances or classes, will not be prevented or detected and corrected
on a timely basis by the accounting and internal control systems.
Internal control system means all the policies and procedures adopted by the management
of an entity to assist in achieving management's objective of ensuring, as far as practicable,
the orderly and efficient conduct of its business, including adherence to management
policies, the safeguarding of assets, the prevention and detection of fraud and error, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information.
Control procedures means those policies and procedures in addition to the control
environment which management has established to achieve the entity's specific objectives.
Consider
Commitment to competence
Consider
Consider
n The degree to which difficult questions are raised and pursued with
management
Consider
Organizational structure
Consider
Consider
Consider
Once risks are identified, management considers their significance, the likelihood of their
occurrence, and how they should be managed. Management may initiate plans,
programs, or actions to address specific risks or it may decide to accept a risk
because of cost or other considerations.
When documenting the entity’s risk assessment process risks can arise or change due to
circumstances such as the following
n New personnel
n Rapid growth
n New technology
n Corporate restructurings
(c) Information system, and business processes for financial reporting, and
communication
An information system consists of infrastructure (physical and hardware components),
software, people, procedures, and data. Infrastructure and software will be absent, or
have less significance, in systems that are exclusively or primarily manual.
Certain control activities may depend on the existence of appropriate higher-level policies
established by management or those charged with governance. For example,
authorization controls may be delegated under established guidelines, such as
investment criteria set by those charged with governance; alternatively, non-routine
transactions such as major acquisitions or divestments may require specific high
level approval, including in some cases that of shareholders
Performance reviews
Information processing
Physical controls
Segregation of duties
n authorizing transactions
This would reduce the opportunities to allow any person to be in a position to both
perpetrate and conceal errors or fraud in the normal course of the person’s duties.
Examples are:
Consider:
n ongoing monitoring activities (activities are built into the normal recurring
activities)
n separate evaluations
I Introduction
n document the fraud risk factors identified that indicate the possibility of either
fraudulent financial reporting or misappropriation of assets, and our response
n document circumstances that we have encountered that may indicate that there is a
material misstatement in the financial statements resulting from fraud or error and
the audit procedures performed to determine whether the financial statements are
materially misstated.
Documentation may be included in this working paper, or other working papers (with
cross-reference to the Fraud Risk Document).
Preparation of this document is started when fraud risk factors are initially identified
during the planning phase of the audit and updated during the substantive procedures,
evaluation and reporting stage if additional fraud risk factors are identified that cause us to
believe that additional audit procedures are necessary.
(a) Fraud
Fraud involves (a) motivation to commit fraud; and (b) a perceived opportunity to commit
fraud.
(b) Responsibilities
The primary responsibility for the prevention and detection of fraud rests with those
charged with governance and the management of an entity by setting the proper tone,
creating and maintaining a culture of honesty and high ethics, and establishing appropriate
controls to prevent and detect fraud within the entity. However, systems of accounting and
internal control system may reduce but cannot eliminate the risk of misstatements caused
by fraud hence management assumes responsibility for any remaining risk.
During the planning phase of an audit, auditor makes enquiries of management concerning
fraud and error. We may also seek the views of those charged with governance.
n the work of the entity’s internal audit function and whether internal audit has
identified fraud or any material weaknesses in the system of internal control
If the entity has established a programme that includes steps to prevent and detect fraud,
we enquire of those persons overseeing such programmes as to whether the programme
has identified fraud risk factors.
Document the results of our enquiries below. State which member of management we
enquired of and the date of the enquiry.
Document our understanding of management’s assessment of the risk that the financial
statements may be materially misstated as a result of fraud.
Document the results of our enquiries of management concerning the accounting and
internal control systems management has put in place to address the risk of material
misstatement due to fraud, and to prevent and detect error.
Document the results of our enquiries to determine whether management is aware of any
known or suspected fraud and discovered any material errors.
Following our enquiries, consider whether there are matters of governance interest to
discuss with those charged with governance of the entity
During the audit, the team should discuss the susceptibility of the entity to material
misstatements in the financial statements resulting from fraud or error.
n consider where errors may be most likely to occur or how fraud may by perpetrated
n gain a better understanding of how the results of the audit procedures that are
performed may affect other aspects of the audit
n decide which members of the audit team will conduct certain enquires or audit
procedures
n decide how the results of our enquiries and audit procedures will be shared.
We may also discuss matters that were taken into consideration during our Client
Acceptance or Client Continuance procedures as they relate to fraud risk.
During the audit, we consider whether events or conditions that provide an opportunity, a
motive or a means to commit fraud, or indicate that fraud may already have occurred, are
present. Such events or conditions are referred to as “fraud risk factors”. We identify fraud
risk factors that may indicate the possibility of either fraudulent financial reporting or
misappropriation of assets.
Response
Our response to fraud risk factors is influenced by their (a) nature and (b) significance. In
some cases, our judgment may be that the audit procedures, including both tests of control
and substantive procedures already planned, are sufficient to respond to the fraud risk
factors. In other circumstances we may need to modify the nature, timing and extent of
substantive procedures to address fraud risk factors present. In these circumstances,
consider whether the assessment of the risk of significant misstatement calls for (a) an
overall response, (b) a response specific to a particular account balance, class of
transactions or assertion, or (c) both types of responses.
Fraud risk factors relating to fraudulent financial reporting may be grouped as follows:
Document the fraud risk factors identified, for example while obtaining or updating our
understanding of the business, as a result of our enquiries of management or during
our audit team discussions, that may indicate the possibility of fraudulent financial
reporting.
Response
Document our response to the fraud risk factors identified. Consider the examples of
possible responses in ISA 240, Appendix 2.
n Inventory and other assets' characteristics such as small size with high
value and high demand accompanied with lack of ownership
identification
Document the fraud risk factors identified, for example while obtaining or updating our
understanding of the business, as a result of our enquiries of management or during
our audit team discussions, that may indicate the possibility of misappropriation of
assets.
Response
Document our response to the fraud risk factors identified. Consider the examples of
possible responses in ISA 240, Appendix 2.
Controls:
(c) Consideration at the account balance, class of transaction and assertion level
Specific responses to the auditor's assessment of the risk of fraud will depend upon the
types or combinations of fraud risk factors or conditions identified, and the account
balance, class of transaction and assertion may affect.
Inventory quantities
Others
During the course of the audit, when we encounter circumstances that may indicate that
there is a material misstatement in the financial statements resulting from fraud or error,
we perform audit procedures to determine whether the financial statements are materially
misstated.
Examples:
n Unsupported transactions
Business processes are often facilitated by computer information systems. In planning the audit,
we obtain an understanding of the:
W.P. Ref
Where are the main data centers located? Does the Company have
other significant IT centers?
What platform are the systems on and where are they located?
W.P. Ref
6. Please describe future plans for the applications during the next
1-2 years.
For example, upgrades, adding new functionality (CRM, SCP, Web), use of
a data mart/warehouse, migrating to a new application (BaaN customers),
developing an in-house application (“make vs. buy”).
W.P. Ref
W.P. Ref
10. What physical security controls have been established for the IT
environment. Obtain a description of access security, environmental
controls, etc.
W.P. Ref
15. How does the Company ensure its security controls (policies,
access procedures, maintenance) remain relevant and effective?
W.P. Ref
n Systems/data recovery
2. What redundancy and diversity have been built into the wide area
network? How is the network monitored and how frequently? Do
automated alarms and/or notifications signal support personnel in case
part of the network fails?
W.P. Ref
12. Are problems tracked and trended in total volume, and by project or
type of problem? Is any analysis performed to identify recurring
problems and implement permanent corrections? What are the most
significant types of problems?
13. What are the data file backup procedures, including frequency,
retention, and storage location of back-up media? What objects are
included in the back-up procedures (source, scripts, database objects,
etc.)?
W.P. Ref
14. Does I.T. have documented contingency plans including such things
as:
n Software failures
n Network failures
n Power interruption
15. Does the Company have an I.T. Disaster Recovery Plan (provide a
copy if possible) including;
17. System availability strategy and standards, including the use of any
outsourced service providers, if applicable.
18. Schedule for testing the plan and results of the last test
19. Do the sites and business units have a business resumption plan,
including plans for recovery from:
W.P. Ref
3. How often are mission critical applications upgraded? When was the
last upgrade?
n For example:
W.P. Ref
2. Have Third Party Reports (SAS 70) been obtained and reviewed?
What steps have been taken to assess and act on any client control
considerations or signficant weaknesses identified in the reports?
Review the reports for the following:
W.P. Ref
3 What are the business risks, concerns and issues you have focused on
during the past year?
n Projects
4. What are the key business drivers and how does IT enable them?
1. For example:
n IT Steering Committee
W.P. Ref
I Purpose
Completion of General Purpose CIS Checklist should be considered in planning an audit.
Where a more detailed review of the IT control environment is required, other CIS
questionnaires should be completed. This checlist assists in a high level evaluation of the
IT control environment to identify any control weaknesses for discussion with the client.
It also assists in forming a preliminary assessment as to whether reliance on CIS controls
may be possible. The output of this checklist is a Client IT Discussion Agenda (CDA).
III Questions
The worksheet is divided into seven sections, consisting of generic questions applicable to
all computing environments. Each section is headed by a control objective. Supporting
questions provide information to assist the auditor in assessing the stated objective. For
most of the supporting questions, there is a 'Consider', providing the reviewer with issues
to think about when answering the question. The 'Consider' points are not mandatory;
their aim is to provide guidance only.
The questions are designed as an aid to evaluating the IT control environment. The
auditor will usually describe the relevant control features in narrative in the 'Comments /
WP Ref.' column, cross-referenced to supporting working papers as necessary. The 'Y/N'
column is used to highlight overall conclusions and the 'CDA' column to flag items for
discussion with the client.
Guidance notes are included on the facing page of each question, including the implication
of a 'No' answer which is noted in italics. These notes are for guidance only in completing
the questionnaire and do not necessarily cover all relevant issues.
IV Conclusion
If issues are raised from this document, a decision should be made whether to include
points, specifically for 'No' answers, in the Client IT Discussion Agenda, for discussion by
the engagement partner with the client. This should be indicated in the column marked
'CDA'.
Y/N
Y/ CD Comments / WP Ref.
N A
Y/N
IT Strategy
Consider
Y/ CD Comments / WP Ref.
N A
Y/N
Consider
n Objectives
n Distribution to staff
Consider
n Anti-virus procedures
n Security
n Distribution to staff
Y/ CD Comments / WP Ref.
N A
Y/N
Internal Audit
Consider
n Terms of reference
n Organisation chart
n Independence
n Expertise in IT
n Training or experience
Control Consciousness
Y/N
(Obtain a copy)
Consider
n Number of IT staff
n Systems programmers
n Application programmers
n Database administrator
n IT operations
n Data input
n Network security
Consider
Y/N
Consider
n Menu facilities
Consider
n documentation
n review
Y/N
Consider
n Computer room
n Communications equipment
n Off-site storage
Y/N
Consider
n Prototyping software
n Programming standards
5.2 Packages
Consider:
Consider
n Specification of requirements
n Training
Consider
n System documentation
n Operating instructions
n User documentation
Consider
n Management authorisation
n Test procedures
Y/N
Back Up Procedures
Consider
Consider
n Data files
n Programs
n Systems software
n Systems documentation
n Operating procedures
n User procedures
Consider
Consider
Consider
n Periodic testing
Insurance
Consider
n Consequential loss
n Denial of access
n Exclusion clauses
Operations
Consider
n Processing requirements
n Emergency changes
n Incident reporting
n Housekeeping
Summarise the internal control weaknesses identified during our review which have an impact on the
following control objectives, for consideration when planning reliance on CIS controls.
1. Personnel duties, both within the IT department and between the IT and user functions, are
reasonably segregated to prevent and/or detect errors or irregularities.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
3. Systems development and program changes are authorised, tested and documented, and should
operate as designed.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Client:
1. IT strategy.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
10. Other (eg relevant issues from the Engagement Overview and Client IT information form)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
1. Installed Capacity
2. Capacity utilized
3. Production in units i.e. Kgs. metres etc.
4. Production after conversion, if any.
5. Gross Sale in % - Local Local Gross Sales
Gross Total Sales
12. Store and spares consumption per unit Store & Spares consumption in
of production. rupees
units produced
FORMULA Y1 Y2 Y3 Y4
18. Net Profit / (Loss) per unit sold Net Profit / (Loss)
unit sold
20. Production in %
In case of Textile
B. PROFITABILITY RATIOS
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______________________________________________________________________________________________
______________________________________________________________________________________________
FORMULA Y1 Y2 Y3 Y4
C. ACTIVITY RATIOS
1. Inventory Turnover
FORMULA Y1 Y2 Y3 Y4
D. LIQUIDITY RATIOS
E. LEVERAGE / CAPITAL
STRUCTURE RATIOS
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(e) Liquidity
WORKING CAPITAL
OPERATING CASH FLOW
CURRENT RATIO
QUICK RATIO
INTEREST AND DIVIDEND COVERAGE
I Introduction
This working paper is relevant when auditor consider the work of internal auditing to:
We consider how the internal audit function affects the entity’s accounting and internal
control systems and develop an effective audit approach in the following manner.
Approach Documentation
Refer to ISA 610, “Considering the Work of Internal Auditing” for further guidance.
n whether management acts on internal auditing's reports and recommendations and how
this is evidenced
n the due professional care of internal auditing, especially whether the work is adequately
planned, supervised and reviewed
Comments/Preliminary Assessment
(a) Evaluate
1. We consider whether:
n the work is performed by people with adequate technical training and proficiency
n sufficient appropriate audit evidence is obtained to afford a reasonable basis for the
conclusions reached
n conclusions are appropriate in the circumstances and reports are consistent with the
results of the work performed
Evaluation
(b) Test
List any of the procedures below relating to testing of internal auditing that may be considered
given specific client circumstances. Our tests of the internal audit function's work may include
the following procedures.
n Enquire of the internal audit function about the nature of its work
n Re-perform some of the audit procedures previously performed by the internal audit
function
For example, we may test the same controls, transactions or balances as the internal audit
function tested.
For example, we may test controls, transactions or balances other than those the internal
audit function tested.
[List any other procedures relating to internal auditing issues that may be considered given
specific circumstances. Our procedures, and the documentation of those procedures, are to
be sufficient to support our decision to rely on internal auditing’s work.]
2. Inform internal auditing of their responsibilities, the objectives of the procedures they are
to perform and matters that may affect the nature, timing and extent of audit procedures
3. Supervise the work and review the working papers that the internal audit function prepares
on our behalf
Conclusion
I Introduction
This document should be prepared by an auditor when:
Documentation may be included in this document, or other working papers (with cross-reference
to this document).
Section I
Professional competence of the other auditor
Consider:
(3) result of inquires and discussion with other auditor and banker(s)
Advise the other auditor at planning stage and obtain written representation about:
Consider re-performing these procedures. Nature, timing and extent will depend on circumstance
of the engagement and professional competence of other auditor.
Consider the significant findings of the other auditor and discuss with management and other
auditor.
Please provide details of areas where you have documented the company’s system by
means of flowcharts and / or notes indicating for each area the method used.
Please provide details of all significant weaknesses in the company’s system of internal
controls or deficiencies in the accounting records. If these have been reported in
writing to the company’s management please attach a copy of this report together with
the company’s response if any.
Where significant elements of the accounting records are processed by EDP systems,
describe your audit approach (e.g. use of specialists or other suitably trained staff; use
of enquiry programs or other computer assisted techniques) and explain how you have
satisfied yourselves about the operation of any internal controls with EDP elements
upon which you have relied.
Please provide details of any transactions (e.g. purchase and sale of assets, loans,
guarantees, contracts, etc.) with the directors of the company, the parent company,
other group companies or other related parties and indicate whether these are disclosed.
Conclusions:
Rupees
Partner 3,500
Qualified Assistants
Senior (5 years and above) 2,100
Junior (0-5 years) 1,400
Supervisor 500
Senior 350
Semi-Senior 285
Junior 175
2. The level of fee is to be mutually agreed between the auditor and his client, which largely
depends upon the volume of work involved and estimated time to be incurred by the
auditor. The Council whilst recognizing this principle is however, of a view that there has
to be minimum threshold of audit fee.
3. To achieve the desired objective, the following parameters are being prescribed which
shall govern the determination of a minimum prescribed audit fee (which may be increased
by consent having regard to specific circumstances of a company) based on the
applicability of any two parameters within a category. In case of applicability of a
combination of parameters in a specific situation, the highest prescribed minimum audit
fee shall be applicable.
Note:
i) The terms “turnover”, and “fixed assets” shall have the meanings assigned to them
in the Fourth Schedule to the Companies Ordinance, 1984 and the term “equity” as
defined in IASC Framework for the Preparation and Presentation of Financial
Statements.
ii) Considering the practical difficulties being faced by various practicing members in
the determination of audit fee, the Council has decided that the prescribed minimum
audit fee shall be charged without any exception. However, in case of an existing
audit client, the present audit fee shall be enhanced to the aforesaid prescribed level
over a period of three years with mutual consent provided it is not less than 60% of
the prescribed minimum in the first year. Nevertheless, in case of acceptance of an
audit client by a practicing member for the first time the prescribed fee levels shall
be strictly observed.
Listed Other
Companies Companies
The minimum audit fee prescribed above is exclusive of the above additional services to
be rendered by a statutory auditor and professional fee for such services shall be charged
separately by mutual consent.
6. In case of joint audits, fee may be shared among the auditors as may be mutually agreed
between them.
8. The hourly rates and fee are exclusive of traveling and hotel expenses, out of pocket
expenses and other incidental costs which would be reimbursable to auditors at actual.
9. In case of a religious or charitable institution or a company “not for profit”, the practicing
members may undertake to do the audit on a token fee or on an honorary basis.
10. At the time of quality control review, the reviewer will ensure the compliance of this ATR.
This ATR supersedes ATR 14 (revised) issued pursuant to the Council's decision of 30
July 2001.
n Time Budget
CLIENT :
PERIOD OF ACCOUNT : Staff :
DETAILED TIME BUDGET
Prepared by Reviewed by Approved by
Budget
Travelling
Supervision
Reports/Memoranda
Review Memorandum
Standard Schedule for Audit Summary file
General
Conferences with client
TYPING
COMPARING
GRAND TOTAL (hours)
Rate per unit
Valuation
Manager
Partner
COST
FEE
OVER (UNDER) RECOVERY
Time Sheet
Client Profile
n Nature of client business
n Company Secretary
n Legal Advisor(s)
n Tax Advisor
n Major Banks
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Note : Information shall be used in performing audit procedures (e.g. Test of Controls &
Substantive Testing). If there are no significant changes since previous audit, this may
be transferred to the permanent file.
CLIENT NAME
DATE
VENUE
TIME
CONCLUDING
REMARKS
Sign off
Prepared by Reviewed by
Date Date
Availability of Accounting
manuals and any changes
Stock
Cask
Investment
Others
Clients expectation of
Completion of Interim audit
Clients expectation of
completion of audit
Details of branches /
Operations
a. No. of staff
c. Reporting authority
e. Frequency of reports
n Banks
n Debtors
n Creditors
n Legal Advisors
n Tax Advisors
n Other
Changes in economic
conditions
Significant Changes in
Business since Last year
Changes in management /
Stake holders / Owners
Changes in information
systems and technology in use
Changes in significant
accounting processes
Effects of outcomes of
litigation since last year
Acquisitions / disposals of
associates or any anticipation
thereof
Significant changes in
accounting policies
Miscellaneous
Letter Addressed
Dated To From Particulars
Note: Only document those significant matters, which needs to be communicated to the audit
staff except for those matters documented in “Instruction from client”.
S. Schedule
Description of issue Service Improvement Plan
No. Reference
EXECUTION PHASE
General Instructions for Documentation of Audit Execution File
1. Planning file must be completed, reviewed and signed by at least a senior audit staff before
commencement of field work.
2. The job incharge should ensure that following has been done / completed before
presenting the file for review:
2.1 Total of the lead schedules for each head agrees with the accounts.
2.2 Lead schedules must be supported by the audit evidence gathered during the course
of the audit
2.3 There should be a conclusion preferably on the lead schedule on each financial
statement component, signed by the person who has executed the work as well as
the reviewer.
2.4 Lead schedules and sub-schedules are initialled and dated by auditor who has
prepared the schedule and carried out the work.
2.5 List of final outstanding points and exceptions with their disposals should be stated
in un-ambiguous terms and cross-referenced to working paper files.
2.6 Audit symbols used must explain the work performed and ensure that percentage of
work completed must be stated for each financial statement component, which is not
fully verified. If sampling procedures used by the auditor, ensure that steps are
properly correlated with the materiality threshold determined at the planning stage
2.7 All audit program steps should be cross-referenced with the schedules containing
work done.
2.8 A copy of the relevant audit program is to be filed with each significant financial
statement component
3. Auditor must ensure that observations relating to internal control weaknesses (revealed
during test of controls / cut off procedures) are properly addressed in draft management
letter or internal control memorandum.
Sampling
I Definition of sampling
Para 3 of AS 19, 'Audit sampling and other selective procedures' states that: "Audit sampling
(sampling) involves the application of audit procedures to less than 100% of items within an
account balance or class of transactions such that all sampling units have a chance of selection.
This will enable the auditor to obtain and evaluate audit evidence about some characteristic of
the items selected in order to form or assist in forming a conclusion concerning the population
from which the sample is drawn. Audit sampling can use either a statistical or a non-statistical
approach."
II Importance of sampling
Bulks of business transactions do not justify a review or audit of the entire account balances and
class of transactions. An auditor must apply various methods and techniques in selection of a
limited size of population to verify or review. Selected sample helps the auditor in forecasting
conclusion on the entire population based on the selected sample.
Based on sample size may be varied based on the conclusion. Appendix 1 of AS 19, 'Audit
sampling and other selective procedures' depicts the following examples of factors in framing
sample size for Test of controls.
Factors Effect on
sample size
An increase in total error that the auditor is willing to accept (tolerable Decrease
error)
An increase in the amount of error the auditor expects to find in the Increase
population
III Risks
The risk associated with the sampling is the fact that the incorrect fake / fraudulent transaction or
procedure may not be selected in sampling. This may result in drawing incorrect conclusions /
opinion based on the result of the samples being selected.
The question is how to encounter these risks associated with sampling? The auditor has to
consider the following factors and sampling methodology in selection of a sample:
Whichever form of sampling is used by the auditor all the population shall have a chance of
selection. Further, as the purpose of sampling is to draw conclusions about the entire population,
the internal auditor shall endeavor to select a representative sample by choosing samples, which
have characteristics typical of the population.
- the results of a test on a sample can only be evaluated to form a conclusion on the
population from which the sample is taken
- sampling from a population does not establish the completeness of that population (i.e.
for completeness other specific tests are performed e.g. checking subsequent period expense
vouchers, delivery challans / good receiving notes before and after year end etc.).
- the different considerations that apply to debit or credit balances within an account
balance
- the different considerations that apply to debit or credit balances within an account
balance
- the extent to which a population can be divided into smaller populations, each of which
is a group of sampling units with similar characteristics (that is, how stratified the population
can be).
e.g. In net debtors, we have some credit balances alongwith debit balances, thus, the
population is stratified into two, (a) Credit Balances and (b) Debit Balances.
n All errors found from all tests should be recorded on an overall ‘summary of error’ schedule;
the cumulative effect of all errors found from all audit tests may be material, even if, on an
individual test basis, errors are less then the tolerable error level.
n Consideration should also be given as to what level or amount of error is expected from the
test. A high expected error rate will imply that a larger sample should be taken. Presently, we
are considering a medium risk factor i.e. 1.8 as we heavily rely on the results of our
substantive procedures.
(e) Setting the sample size for substantive tests of transactions and balances
n The following factors are particularly important when setting a sample size:
n sampling risk
Sampling risk is the risk that the conclusion, based on the sample tested, would differ from
the conclusion that would be reached if the entire population were subject to testing.
Sampling risk will always be present if a sample is tested, rather than 100% of a population;
the key factor is to decide the level of sampling risk to accept. The vital element in this
decision is how much reliance is being placed on the test. The reliance on the test will be low
if:
n The lower the risk the auditor is willing to accept, the greater the sample size will need to be
and lesser the transaction will be selected for verification. Therefore, the level of sampling
risk to accept will be decided by his assessment of inherent, analytical and control risk.
Presently based on our experience with clients and management attitude of companies, we
are setting risk factor to 1.8.
n Sampling risk can be contrasted with non-sampling risk, which occurs during any audit
procedures, since most evidence is persuasive rather than conclusive. The auditor may use
inappropriate procedures or misinterpret evidence and fail to recognise an error and he
attempts to reduce non-sampling risk by appropriate planning, supervision and review
procedures.
V Sampling methodology
Sample shall be drawn from the most current period that is from the immediately ended quarter.
Drawing of sample could be extended to a full year in circumstances where the result of tests
signifies nonconformity with the internal controls assessed during the preliminary review stage.
In these cases the best practice shall be to draw majority of samples from the most recent period.
Various techniques may be used in selection of a sample depending on the nature, size of
population and judgment of auditor. The following are some of the examples of sampling
techniques.
VI Sampling techniques
Sampling is classified as probabilistic (statistical sampling) or non-probabilistic.
n A probabilistic sample must be unbiased so that each element of the population has the same
chance of selection, and the probability of selection is known. The result can then be
statistically evaluated, objectively interpreted, and precision and reliability can be calculated.
Bias can be avoided by choosing samples using a randomization process.
n Non-probability sampling techniques result in samples that may not contain each element of
the population. There is also no attempt to control bias, as the auditor decides which item to
select.
n the population size and composition (the population is the class of transactions being tested,
and a sampling unit is an individual element in the population);
The most practical use of statistical sampling is in the testing of attributes to determine whether
prescribed control procedures are in use. For example, attributes to be tested in a sample of
vouchers would include the verification that each was appropriately authorised.
Random selection
The most appropriate method of selection is by use of random numbers. Random number tables
or computer program can provide the numbers. Each item in the population is equally likely to
be selected and the result can be statistically evaluated.
Systematic selection
The main characteristic of this method is the use of an interval, for example, selecting every
tenth item in a sequence. There is a potential bias as only the first item is selected randomly.
Therefore a statistical evaluation of the sample selected is not appropriate.
This method has the simplicity of attributes sampling but provides a statistical result in rupees. It
tests details of balances to determine whether the account balance being audited is fairly stated.
The population is the recorded aggregate rupee amount of the entire population, and a sample
unit is an individual account balance in rupees.
the transaction populations are relatively small, and the auditor has prior knowledge of the
population.
In order to ensure that a judgemental sample is representative, the auditor shall consider the
following:
n Test high value items more heavily than the smaller ones. If these are error free there is a
high chance that the more normal transactions will also be error free.
If errors occur in the sample, judgement is required to arrive at an opinion on the total
population. There may be a need to extend or even abandon a sampling procedure.
Block sampling
Several items are selected in sequence. When the first item is selected, the remainder are chosen
automatically. A sample of 100 items could consist of 5 blocks of 20. For example, a block
sample might include all input forms in a daily batch. The limitation of the approach is that the
sample is not necessarily representative.
Haphazard selection
Such sampling is performed without any regard to the size of the sample population, source or
other distinguishing characteristics. The most serious limitation is that the selection cannot be
performed without some bias, especially if the auditor is seen to select items that are easily
located.
On the basis errors found in the sample of the population the auditor shall project monetary
errors for the whole population.
We, now, make out a simple table for calculating Sample Size:
Table A
Extract of sample sizes for Sampling Attributes Expected Rate of occurrence not over 5%
Confidence Level 95%.
Desired Precision
Number of items in population ± 1% ± 2% ± 3%
Table A meats that the auditors would like a 95% level of assurance or confidence that his results
will be within ± 2% (say) precision level of the actual amount. At this point, it would be
noteworthy that the auditor can use a spreadsheet package in computer to calculate random
numbers. This is illustrated below:
Step 7: Change the total sample size figure in A1 and all figures will automatically
change.
Explanation: The @RAND is the random number function. It is dependent upon time and will
change each time you type it. The $A$1 is the absolute address of cell A1, which if copies, will
not change relatively.
Step 3 is necessary to format the range to zero decimal places. The @RAND give a number
between 0 and 1 (say 0.0235). This is multiplied by sample size to get random number.
The audit procedure being following is the sending of letters to selected customers to obtain
confirmation of their balances. The client has approximately 15,000 customers. Balances range
from small amounts to seven digit figures. Over 80% of replies have been received in the past.
As to the balance 20%, it is assumed that the auditors gets satisfaction equivalent to the receipt
of a signed confirmation from a “no reply” because there exist certain customers who will not
reply no matter how persuasive the request might be. So, the sample will be considered to
comprise all requests not only the replies.
2 The Sample
.
b) Errors found 42
This implies that the total error will range around Rs. 7 lakhs. Thus the auditor may modify his
audit programme accordingly.
The following table shows how the acceptable level of detection risk (shaded area) may vary
based on assessments of inherent and control risk.
Purpose
The purpose of an audit program is to group management assertions in the form of financial
statements into auditor's audit objectives and then link the understanding obtained during the
planning phase related to the financial statement assertions to the assessment of the risk of
significant misstatement (ROSM) and planned audit procedures. It documents:
n A summary of the audit objectives related to this process and whether the audit objectives
are critical
n Financial statement assertions that were combined into each audit objective
n Planned procedures to gain audit evidence to support ROSM for each audit objective (may
also include results of the procedures)
n Planned substantive audit procedures for each audit objective (may also include results of
the procedures).
The enclosed list contains possible suggested audit procedures for different financial statement
components (mostly for the manufacturing concern). All of these procedures will rarely be
selected to minimize the detection risk to an acceptably low level.
The following alphabets have been used to indicate the assertion addressed in a step:
Occurrence O
Completeness C
Accuracy A
Cut off T
Classification L
Existence E
Valuation V
Allocation K
Understandability U
2. Investment Properties
3. Investments
7. Trade debts
Amount in Rs.
Account balances:
Tangible fixed assets (owned and leased)
Intangible fixed assets
CWIP
Classes of transactions:
Depreciation
Amortisation
Loss/ gain on disposal
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Investment properties
Classes of transactions:
Depreciation / gain/ loss due to change in fair value
IR CR ROSM
IR CR ROSM
Note: Steps should be carried out on the basis of model (cost or fair value) adopted by the client.
Test of Controls
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Investments
n In subsidiaries and associates
n Held to maturity
n Available for sale
n Held for trading
Classes of transactions:
Dividend
Interest
Gain/ loss on revaluation
Gain/ loss on disposal
Test of Controls
Analytical Procedures
Test of Details
Investment Income
Amount in Rs.
Account balances:
Long term loan and advances
Provision against long term loan and advances
Classes of transactions:
Interest income
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Long term deposits and prepayments
Provision against long term deposits and prepayments
Classes of transactions:
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Stores
Spares
Raw material
Work-in-process
Finished goods
Classes of transactions:
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Advances
Deposits
Prepayments
Other receivables
Provision against advances, deposits, prepayments & other receivables
Classes of transactions:
Payments of advances, deposits, prepayments & other receivable
Refund/ adjustment of advances, deposits, prepayments & other receivable
Provision for the year against bad and doubtful balances
IR CR ROSM
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Trade debts
Classes of transactions:
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Cash in hand
Cash at bank- Current
- PLS
Classes of transactions:
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
1. Accrued Expenses
3. Deferred Liabilities
4. Direct Taxation
5. Dividend Payable
6. Equity
10. Payables
Amount in Rs.
Account balances:
Classes of transactions:
Test of Controls
Analytical Procedures
Test of Details
2. Loss contingencies.
3. Retirement plans.
6. Lease obligations.
Amount in Rs.
Account balances:
Classes of transactions:
IR CR ROSM
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Classes of transactions:
IR CR ROSM
IR CR ROSM
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Classes of transactions:
IR CR ROSM
IR CR ROSM
Analytical Procedures
Test of Details
1. DIRECT TAXATION
Amount in Rs.
Account balances:
Classes of transactions:
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Classes of transactions:
Analytical Procedures
Test of Details
a) Memorandum of association
b) Form ‘A’
Amount in Rs.
Account balances:
Classes of transactions:
Analytical Procedures
Test of Details
Amount in Rs.
Account balances:
Long term debt
Classes of transactions:
Analytical Procedures
Test of Details
1. CONFIRM DEBT
Amount in Rs.
Account balances:
Classes of transactions:
IR CR ROSM
Analytical Procedures
Test of Details
2. TEST PRESENTATION
Amount in Rs.
Account balances:
Classes of transactions:
IR CR ROSM
IR CR ROSM
Test of Controls
Analytical Procedures
Test of Details
1. TEST PAYABLES
3. Purchase commitments.
Amount in Rs.
Account balances:
Short term borrowings
Classes of transactions:
IR CR ROSM
IR CR ROSM
Analytical Procedures
Test of Details
1. CONFIRM DEBT
Amount in Rs.
Account balances:
Classes of transactions:
IR CR ROSM
IR CR ROSM
Analytical Procedures
Test of Details
1. Sales
2. Cost of Sales
3. Admin Expense
4. Financial Charges
5. Other Income
Amount in Rs.
Account balances:
Classes of transactions:
TEST OF CONTROLS
ANALYTICAL PROCEDURES
TEST OF DETAILS
Amount in Rs.
Account balances:
Classes of transactions:
TEST OF CONTROLS
ANALYTICAL PROCEDURES
TEST OF DETAILS
Amount in Rs.
Account balances:
Classes of transactions:
TEST OF CONTROLS
ANALYTICAL PROCEDURES
a) Develop expectations of
significant expenses.
TEST OF DETAILS
Amount in Rs.
Account balances:
Classes of transactions:
TEST OF CONTROLS
ANALYTICAL PROCEDURES
TEST OF DETAILS
Amount in Rs.
Account balances:
Classes of transactions:
TEST OF CONTROLS
ANALYTICAL PROCEDURES
TEST OF DETAILS
n Authorisation;
n Authorisation;
IV Others
S. No. Caption Reference No. Page No.
1. WWF
Amount in Rs.
Account balances:
Classes of transactions:
TEST OF CONTROLS
ANALYTICAL PROCEDURES
TEST OF DETAILS
Purpose
The purpose of this document is to obtain an understanding of the entity’s legal and regulatory
framework and obtain sufficient and appropriate audit evidence regarding non-compliance by the
entity with laws and regulations that may materially affect the financial statements. It is
recognised that some laws and regulations may have a fundamental effect on the operations of
the entity. Non-compliance with certain laws and regulations may cause the entity to cease
operations, or calls into question the entity's continuance as a going concern. The laws and
regulations that affect the determination of material amounts and disclosures in the financial
statements may relate to, for example:
n the form and content of financial statements
n industry specific requirements
The Audit Programme - Laws and Regulations includes the following sections:
II Audit Procedures
II Audit Procedures
3.1
3.2
3.3
4.1
4.2
4.3
Leads
n Long Term Loans
n Fixed Assets
n Redeemable Capital
Leads Schedule
n Stock in Trade
Format of Confirmation
I Bank Confirmation
The Manager
Bank's Name and Branch
Address
Date: _________
Dear Sir,
Name of Client
In accordance with your above named customer’s instructions given hereon, please send
DIRECT to us at the above address, as auditors of your customer, the following information
relating to their affairs at your branch as at the close of business on (Year end date) and, in the
case of items 2, 4 and 9, during the period since (Year start date).
Please state against each item any factors which may limit the completeness of your reply; if
there is nothing to report, state ‘NONE’.
It is understood that any replies given are in strict confidence, for the purposes of audit.
BANK ACCOUNTS
(1) Full titles of all accounts together with the account numbers and balances thereon,
including NIL balances:
(a) where your customer’s name is the sole name in the title;
(b) where your customer’s name is joint with that of other parties;
NOTES
(i) Where the amount is subject to any restriction (e.g. garnishee order or arrestment) or
exchange control consideration (e.g. ‘blocked account’) information regarding
nature and extent of restriction should be stated.
(ii) Where the authority upon which you are providing this information does not cover
any amounts held jointly with other parties, please refer to your customer in order to
obtain the requisite authority of the other parties with a copy to us.
(2) Full titles and dates of closure of all accounts closed during the period.
(3) The separate amount accrued but not charged or credited as at the above date, of
(4) The amount of mark-up/interest charged during the period, if not specified separately in
the customer’s statement of account.
(5) Particulars (i.e. type of document and accounts covered) of any written acknowledgement
of set-off, either by specific letter of set-off, or incorporated in some other document or
security.
FACILITIES
(6) Details of leasing facilities, loans, overdrafts, cash credit facilities (including standby
facilities), and associated gurantees/ indemnities, specifying agreed limits, unused
facilities, markup/ interest terms, overdue rentals/ installments and in case of term loans,
date for repayment or review.
(7) SECURITY
(a) In respect of facilities, contingent liabilities and derivatives and commodity trading.
Please give
(i) details of any security formally charged in favor of the bank, including the
date and type of charge, (e.g. pledge, hypothecation, etc.)
(iii) Whether the security supports facilities granted by the bank to the customer or
to another party.
(iv) For any arrangements for setoff of balances or compensating balances e.g.
back to back loans, give particulars of any acknowledgement of set off (i.e.
date, type of document and account covered)
CONTINGENT LIABILITIES
(8) Nature, currency, amount and extent of facilities limits and details of period of availability
of agreed facility of all contingent liabilities, viz:
(a) Total of bills discounted with resource to the customer or any subsidiary or related
party of the customer;
(c) Details of any guarantees, bonds or indemnities given by you, on your customer’s
behalf, stating where there is recourse to your customer and/or to its holding, parent
or any other company within the group;
ASSETS
(9) Details of specifying the nature, amount, and maturity date of the assets covered under
Islamic mode of finance (e.g. morabaha, musharika, modarba etc.) or any other mode of
finance including leasing:-
(10) Details of all outstanding contracts specifying the number, deal date, maturity or value
date, price at which the deal was transacted and currency of the contract bought and sold
for: -
(b) Bullions;
(c) Securities;
(d) Others
(11) Information in respect of any letter of comfort obtained by the bank from the parent or any
other associated concern of the company.
(12) A list of other banks, or branches of your bank, where you are aware that a relationship
has been established during the period.
Yours faithfully,
AUTHORISED SIGNATORY
(Client’s Signature)
Format of Confirmation
II Debtors / Creditor Confirmation
Date:
Dear Sir(s)
Our records show a debit / credit balance of Rs.____________ at the close of business on (year
end date).
To ensure an independent verification of this balance, we shall appreciate if you will kindly
check this balance with your records and send your confirmation DIRECT to our auditors,
Messrs. __________, Chartered Accountants, by completing the form below for which an
addressed postage paid envelope is enclosed.
Yours faithfully,
Chartered Accountants
Address
Confirmation of balance
Yours faithfully,
Format of Confirmation
III Lease Confirmation
Date_____________
Dear Sir(s)
Our auditors Messrs. _____________., Chartered Accountants are performing their usual
examination of our financial statements. Please furnish DIRECT to our auditors the following
information relating to the lease arrangements with you as at (year end date).
Please send your confirmation direct to our auditors, Messrs. ________________, Chartered
Accountants, (address of the audit firm). A self addressed postage paid envelope is enclosed
for your convenience.
Yours faithfully,
Format of Confirmation
IV Legal Confirmation
Date___________
Dear Sirs,
Your response should be sent to our auditors. An addressed envelope is enclosed for
your convenience.
Also, please identify any pending or threatened litigation with respect to which you have
not yet devoted substantive attention.
Yours faithfully,
Format of Confirmation
V Loan Confirmation
Date_____________
Dear Sir(s)
Our auditors Messrs. _____________, Chartered Accountants are performing their usual
examination of our financial statements. Please furnish DIRECT to our auditors the following
information relating to the lease arrangements with you as at (year end date).
2 Details of loans and credit facilities, specifying agreed limits and in case of term loans,
dated for repayment and renewals.
3 Amounts of interest, commitment fees, service charges etc., charged during the period.
4 Details of amounts accrued but not charged or credited at the above date: e.g. interest,
commitment fees, service charged etc.
5 Details of any security formally charged to you, including the date and type of charge (e.g.
pledge, hypothcation etc.). If a security is limited to any borrowing or if there is a prior,
equal or subordinate charge, please indicate.
6 Details of customer's assets held as security (other than those mentioned in your response
to 5 above) or for other purposes.
7 Details of any guarantees, bonds or indemnities given to or by you, stating where there is a
recourse to your customer and/or to its holding, parent or any other company within the
group.
8 Any other information that you consider appropriate for the purpose of the audit.
Please send your confirmation direct to our auditors, Messrs. ________________, Chartered
Accountants, (address of the audit firm). A self addressed postage paid envelope is enclosed
for your convenience.
Yours faithfully,
Audit Practice Manual – Revised 312
Planning Phase –
Using the Work of Another Auditor
Format of Confirmation
VI Tax Confirmation
Date: __________
Dear Sir
Our auditors M/s. ______________ Chartered Accountants are performing their usual
examination of our financial statements. Please furnish DIRECT to our auditors the information
requested below involving tax matters for which you have been engaged. Please provide the
information requested below, taking into consideration matters that existed at (balance sheet
date) and for the period from that date to the effective date of your response. Please specify the
effective date of your response if it is other than the date of reply. Your response should be sent
to our auditors. An addressed postage paid envelope is enclosed for your convenience.
2 Details of appeals filed either by the company or by the department indicating details of
significant issues and quantum of amount involved.
4 An other matter which you feel that the auditor should be aware of.
Yours faithfully,
2. The purpose of observing the physical inventory is to determine that the client’s
procedure result in an accurate count. It should be remembered that while the auditor will
himself carry out test counts and extract certain cut-off information he is primarily there to
observe that the client’s procedure are satisfactory.
3. Where the client has an efficient system for inventory records, the physical inventory
may be carried out on a continuous basis as opposed to counting everything in one go at
the year-end. In the case of a client using the continuous basis, the auditor will still be
required to observe a part of this continuous inventory counting.
4. The work of the auditor will normally cover three stages – before, during and after the
physical inventory.
5. The following tasks should be carried out before the physical inventory begins:
(b) Review adequacy of instructions using the preprinted checklist and discuss
any weaknesses in instruction with the client.
(c) Arrange for letters to be sent to third parties holding inventories on behalf of
client, requesting confirmation of these inventories to be sent direct to the auditors
with a copy to the client.
6. The main task during the count to see that the client’s employees are carrying out their
instructions properly.
The physical inventory preprinted checklist should be completed and supporting schedules
will be prepared to cover the following:
n Goods received
n Goods despatched
Details of numbering of inventory sheets used and destroyed and of control of their issue
to and return by those carrying out the physical inventory.
Schedules of items counted by the auditor showing their valuation (this valuation may
have to be completed at final visit).
Details of any old, obsolete, damaged or excess inventories noted during the attendance.
7. The working paper should be prepared in such a manner that the information can be
easily followed up at the final audit visit. Test counts for example should have been traced
to the stock sheets to confirm that they are a proper record of the results of the physical
inventory.
8. The auditor should be aware of the approximate value of the various inventory items as
he may wish to cover high value items in his test count. The valuation of the items counted
by the auditors should be recorded during the count or, if not possible, at the final audit
visit.
9. Where it is considered that physical inventory has been unsatisfactory in any major
respect that matter should be reported immediately to the manager or partner concerned so
that the necessity for a second physical inventory can be considered and discussed with the
client.
10. At the final audit the information obtained at the physical inventory will be followed up.
The work to be carried out will include:
(1) An overall review of the working papers to assess the effectiveness of the physical
count and whether the final audit programme work should be altered as a result.
(2) A check of the cut-off using the information obtained or the last goods received and
despatched note numbers.
(3) A check of the auditor’s test count items to the final inventory sheets.
(4) A test that the final inventory sheets include only the inventories counted by
reference to the details of numbering of inventory sheets obtained during the observation.
(5) A follow up of all outstanding queries including obsolete etc items noted at the
attendance of the physical inventory.
(6) A test to ensure that inventory records have been adjusted to agree with the physical
inventory.
(7) A discussion with management of any weakness which arose, and if appropriate
include points in the internal control memorandum.
Client ___________________________
n Organisation
n Conduct
n Follow-up
1. To corroborate information contained in their books and records which is the product of
a continuous accounting and control system, or
Attendance at inventory counts by the auditor is a standard verification test which serves
to confirm the physical existence of inventories, to corroborate the method of
quantification and to ascertain their physical condition.
(2) Carry out test counts as specified by the scope decisions sheet and record the results
on the sheets attached to the checklist.
Checklist
Organisation
n Tidying up
Conduct
Follow-up
(b) Conclusions
Give below your overall conclusions on the count referring specifically to:
(3) Whether the results of the counts can be relied upon the properly reflect quantities on hand
as of that date and to form the basis of the valuation of inventories.
Client ___________________________
Yes Describe
No
Examples of conditions and events can be traced from paragraphs 8 of ISA 570
Yes Describe
No
IF THE AUDIT TEAM ANSWERS “NO” TO QUESTIONS 1a and 1b ABOVE, STOP HERE AND
DISCARD THE REMAINDER OF THE FORM. HOWEVER, IF THE AUDIT TEAM ANSWERS “YES” TO
QUESTIONS 1a and 1 b ABOVE, THEY SHOULD COMPLETE THE ASSESSMENT IN STEPS 2 & 3
BELOW.
2. Mitigating Conditions. Were any recent conditions or events noted (other than considering
management's future plans) that have mitigated the risk events or conditions identified in
step 1.?
Yes Describe
Yes Describe
No
Going Concern
Consideration of Management's Plans
At this stage of the going concern assessment, there is a rebuttable presumption that the
engagement team will conclude that a substantial doubt exists about the entity’s ability to
continue as a going concern resulting in modification of our report. This presumption can only
be overcome with persuasive evidence in support of the adequacy and achievement of
management’s plans.
1. Stated plans. Obtain and discuss with management its plans to deal with the identified risks.
Indicate the individuals interviewed. (See Appendix A for background information.)
Interviewed: Date:
n Liquidation of assets
n Increase in revenues
n Increase in equity
n Other (describe)
3. Third party guarantees and other financial restructuring agreements. If there are
significant guarantees of financial support from a third party (such as the entity’s parent
company, another shareholder, an affiliate or a general partner of a limited partnership):
a. Describe the nature of the guarantee from the list provided below (and, if the guarantee
is limited, describe its amount and duration). In addition, discuss the nature and
extent of the audit work performed in this area. See Appendix B for a listing of
suggested steps.
n Other (describe):
Yes
Can the Firm place any reliance on the prospective information noted above, adjusted as
necessary, given the history and specific facts and circumstances of this entity?
Yes
5. Overall assessment of management's plans. Does the evidence indicate that all of the
following are true?
n They are likely to allow the entity to operate for at least a year beyond the date of
the financial statements.
No WE HAVE CONCLUDED THAT THERE REMAINS SUBSTANTIAL DOUBT ABOUT THE ABILITY OF THE
ENTITY TO CONTINUE AS A GOING CONCERN.
7. Consultation. The engagement team should consult with the partner in all of the following
situations related to making an assessment of an entity’s ability to continue as a going
concern:
n When the engagement team has identified risks and any related mitigating
circumstances and is evaluating whether those circumstances mitigate the risks or
whether there is a need to consider management’s plans;
n When the engagement team has completed assessing management’s plans and is
assessing whether a report modification is necessary.
n Report modifications
n Prospects for continuation of business for the next two to three years.
n The Firm's vulnerability (litigation risk, risk of damaging reputation, and fee
recoverability).
Documented at:
8. Approved:
Manager Date:
Partner Date:
Introduction
Related party – parties are considered to be related if one party has the ability to Control the
other party or exercise significant influence over the other party in making financial and
operating decisions.
W/P Initial
Ref
System Evaluation
Related Parties
W/P Initial
Ref
(h) transactions at, or near, the year end (refer audit manual
para 5.8.1)
W/P Initial
Ref
Signed Date:
Client:
Period:
Subject: Culmination Audit Meeting Agenda And Minutes
Meeting Held on
Attended by:
Point 1
Minutes
Resolution action
Responsible
Point 2
Minutes
Resolution action
Responsible
Answer YES or NO, where the answer requires any further details, please give that separately,
(where not applicable mark N/A).
Answer
(g) Register for shares and securities not held in the name of
company (Section 209)
B. Have the following forms, etc., wherever applicable, been filed with
the Registrar or other relevant authorities under the Companies
Ordinance, 1984.
Answer
Answer
Answer
Answer
Answer
Name of Client:
Total Income:
Current Year
Prior Year
Prior Year
Tax Partner
Note:
This checklist does not apply to insurance companies and businesses involved in production
of oil & natural gas and exploration & extraction of other mineral deposits.
CLIENT:
PERIOD/YEAR
:
Objectives
Within the overall objective of ensuring that the financial statements present a fair view of the
client's financial position, the objectives regarding taxation are to ensure that:
1. adequate disclosure has been made in the financial statements in respect of company tax
liabilities and have been dealt with properly.
2. any amounts shown in the appropriation account and notes are properly computed and
disclosed.
3. adequate provision has been made for any withholding taxes on non-resident third party
payments being borne by the company.
Work done
The previous year's tax computation, annual returns, assessment orders, appeals statements and
subsequent letters have been reviewed together with the estimates for the current period to achieve
the above objective. The file contains a copy of the previous year's return and a memorandum
signed by a tax manager/partner of work done in the tax review.
Conclusion
It is my opinion that subject to the matters listed on the list of outstanding items.
1. Adequate provision has been for company tax and withholding taxes liabilities.
2. Appropriate disclosures have been made of the overall taxation position on a basis
consistent with the previous period.
1 General
1.10 Provision for bad debts made during the year has 29
been offered for tax.
b) derivation of income
comprising of taxable income and any class
of income which falls under the
presumptive tax regime (PTR); or
c) derivation of income
chargeable to tax under a head of income
and to some other purpose (e.g. exempt
income)
1.39 Foreign losses are set off and carried forward 104
separately from Pakistan source losses and are
not set off against Pakistan source income.
1.41 Credit for advance tax paid under Section 147 147 to
and taxes deducted/paid at source has been 156 &
claimed on tax year basis and not on financial 233
year basis.
2.3.5 Intangibles 24
3.8.3 The amount of any local rate, tax, charge or cess 17 (c)
(being owners burden) in respect of property or
income from property other than any tax payable
under the Income Tax Ordinance, 2001.
n jewelry;
n a rare manuscript;
n a coin or medallion
n an antique.
4.4 Where the capital asset has been held for more 37(3)
than one year, only 75% of the capital gains has
been offered for tax.
(a) dividend;
6.1 Dividend 5
6.2 Royalty 6
6.5 Income of the importer arising from the imports 148 (7)
except in the case of an industrial undertaking
importing goods as raw materials for its own use.
6.12 Tax collected from any person being the owner 234
of goods transport vehicle shall be the final tax
on the income of such person from plying or
hiring out of such vehicles.
Index
1. Gratuity
I Gratuity
14. Are all moneys contributed to the fund and interest / return
on the accumulated balances of such contribution invested
as per Rule 102 of the Income Tax Rules, 2002 (ITR)
together with section 227 of the Companies Ordinance,
1984?
Applicability
5. Investment of Fund
n correctly done;
11. Have you ensured that the “average monthly wages” do not
include any overtime allowance or bonus or cost of living
allowance or any other part of compensation not covered by
the definition of “wages” as defined in the Act.
12. Has the Fund transferred any left out amount out of the
annual allocation to the WWF, within 15 days after the
allocation.
18. Have you ensured that the secretary to the fund is the
management trustee from the accounts department.
20. Miscellaneous
21. All the income of the fund including capital gains are
exempt from income tax.
22. All the sums paid by the fund to workers are exempt from
income tax in the hands of the workers.
24. The Trustees shall not take any remuneration for their
services except the reasonable cost of their travel for
attending Board meeting.
25. Ensure that the Trustees of Fund have opened the bank
account of Fund.
28. Obtain the copy of challan showing the left over amount
deposited into bank.
31. Note that any difference arising between the board and
company relating to the administration of the scheme has
been referred to the Federal Government because the
decision of the Federal Government would be final on any
matter referred to the Federal Government. Obtain the copy
of the decision.
Tax Position
n Provision For Taxation - Year Wise Position
Adjusting Entries
Client: Prepared by Reviewed by
Subject:
Period / Year:
REPORTING PHASE
Financial Statements
File the working of current year’s cash flow statement with previous year’s comparative
figures and properly refer each item with the final draft / initialed financial statements.
Analytical procedures be performed in the audit planning stage to identify possible problem
areas and in the substantive testing stage as a means of gathering substantive evidence in relation
to one or more account balances or classes of transactions (i.e. as a substantive procedure, or
substantive test); and in the opinion formulation stage (overall review stage), as a means of
gathering evidence as to the consistency of the financial statements with the auditor's knowledge
of the business of the entity.
All analytical procedures involve a comparison of the value of the actual (ratio/trend/account
balance / transaction etc.) with the value of the expected (ratio/trend/ account balance/
transaction etc.) with the objective of identifying any unusual or unexpected values. The
procedure requires the investigation of the reason for any unexpected or unusual value.
scanning. An auditor may scan account balances, listings of transactions etc., with the object of
detecting any unusual or unexpected balances or transactions.
ratio analysis. The computation and comparison of the actual value of a ratio with the expected
value. The expected value may be based, for example, on:
Once again, the objective of this analytical procedure is to detect any unusual or unexpected
value for the ratio.
common size analysis is a type of cross-sectional analysis used for comparing the percentage
components of balance sheets and income statements of one entity, or a division of an entity,
with comparable data from one or more other entities/ divisions. This analysis may be used for
either (i) the comparison of a (prospective) client's data with the industry average and/or an
Audit Practice Manual – Revised 374
Execution Phase –
Proposed Adjusting and Reclassification Entries
industry competitor or (ii) for the comparison of income statements of different divisions of the
same entity.
When analytical procedures are used as a substantive procedure (or substantive test), and the
application of the procedures does not identify any unusual or unexpected differences, then, by
inference, the results provide evidence in support of management's assertions.
Analytical procedures generally provide less reliable substantive evidence than the other
category of substantive procedures/tests, (tests of detail). The substantive evidence gathered
using analytical procedures is thus generally used to corroborate other substantive evidence
gathered, rather than used as a sole source of evidence.
Reclassification Entries
Client: Prepared by Approved by
Subject:
Period / Year:
Observations/Notes Disposal
Issue
Reported to:
n Concerned Personnel
n CFO
n CEO
n Board of Directors
Performed By
n
Audit approach
CONCLUSION:
n Resolved
n Adjustment
n ML
n CL
n Report
Following are the examples of items that may be reported in the Summary Review
Memorandum for the review of the partner:
Provisions
Purpose
The engagement partner signs and date the Audit Completion Checklist sections I throughout
each phase of the audit workflow and prior to issuance of the report.
Section III provides a list of policies and professional standards to be considered by the audit
team throughout each phase of the audit workflow. Its primary purpose is to serve as a memory
jogger for the audit team and is reviewed prior to engagement partner sign-off. Additional
considerations may be added to the list based on specific circumstances of each engagement. In
addition, some procedures in the list may not be applicable to every engagement (e.g., use of
internal audit or service organisation auditors).
Engagement Management
I have:
I am satisfied that:
I agree with the opinion reached such that the audit report may
be released.
The note column provides an opportunity to indicate consideration of each step as either
applicable () or not applicable (N). In addition, audit teams may choose to make
additional references in the notes column as considered appropriate.
Procedures Notes
Engagement management
We have reviewed the suitability of accepting the audit and have accepted
the appointment as auditor
We have set the terms of the engagement and obtained an engagement letter
Working papers
n Points raised during the review of the working papers have been cleared
and where appropriate the working papers have been revised. Review
notes have not been retained.
n Someone other than the preparer has reviewed each working paper.
Procedures Notes
n We have and will only make working papers available to third parties
(excluding joint auditors and principal auditors) after consultation with
the engagement partner.
Workflow activities
We have considered all issues raised during the planning phase, summarised
those considered significant and appropriately identified planned audit
procedures in Strategy and Planning Document.
Procedures Notes
In planning the audit, we have assessed the risk that fraud or error may cause
the financial statements to contain material misstatements, and have
enquired of management regarding their understanding of the risk of fraud in
the entity, their knowledge of fraud or suspected fraud that the entity is
investigating or whether they have discovered material errors. We have also
enquired of management regarding the accounting and internal control
systems put in place to address fraud risk and prevent and detect error. We
have documented our understanding of management’s fraud risk assessment,
the accounting and internal control systems in place, and known fraud and
material error in the Fraud Risk Assessment Document
We have documented fraud risk factors that have been identified as being
present in the Fraud Risk Document
Procedures Notes
Workflow activities
We have obtained final Trial Balance from client and ensured that it is
updated for all adjusting entries, reclassifications etc.
We have obtained sufficient audit evidence to form our audit opinion and
have reported our findings
Procedures Notes
Procedures Notes
Need of Specialists
We have determined the need for a specialist (such as CIS Specialist and tax
specialists etc.) and defined the role and responsibility of the specialist.
We have obtained feedback from the specialists on issues arising from their
work and appropriately considered the results of their work in the audit
We have obtained feedback from the specialists on issues arising from their
work and appropriately considered the results of their work in the audit.
When the work of another independent auditor has been used, we have:
n determined how the work of the other auditor will affect the audit
When the work of another independent auditor has been used we have:
n obtained sufficient appropriate audit evidence that the work of the other
independent auditor is adequate for our purpose, in the context of the
specific assignment
Procedures Notes
If it was concluded that the work of the other auditor cannot be used and we
have not been able to perform sufficient additional audit procedures
regarding the financial information of the component audited by the other
auditors we have expressed a qualified opinion or disclaimer of opinion
because there is a limitation in the scope of the audit.
External expert
We have considered the need for use of an external expert, assessed the
professional competence and objectivity of the expert, documented our
decision to rely on the work of the expert and obtained audit evidence
regarding the scope of the expert’s work.
We have obtained sufficient appropriate audit evidence that the work of the
external expert was adequate for our purpose, in the context of the specific
assignment. If the results of the expert’s work did not provide sufficient
appropriate audit evidence or if the results were not consistent with other
audit evidence, we have resolved the matter.
Procedures Notes
Internal audit
If the work of internal audit has been used, we have obtained sufficient
appropriate audit evidence that their work is adequate for our purpose, in the
context of the specific assignment and we have completed the ‘Internal
Audit Function Evaluation’ working paper.
When we used the specific work of internal audit, we evaluated and tested
that work to confirm its adequacy for our purposes and completed the
‘Internal Audit Function Evaluation’ working paper.
Specific topics
Consideration has been given to other specific topics. Such topics include:
n segment information
n corresponding figures
n opening balances
n environmental matters
Procedures Notes
Other Information
Check in
S. No. DESCRIPTION Appropriate Column
Yes No N/A
1. Ensure that final Trial Balance has been prepared by the client
after incorporating all Adjusting Journal Entries, Reclassifying
Journal Entries (if any) by himself or advised by the auditors.
2. Ensure that closing and opening entries have been passed into the
books of account of the Company by the client.
3. Ensure that all requirements of the firm's covering letter have been
met and marked as "Received" on the covering letter by the Job
Incharge.
4. Ensure that the copy of covering letter is cross referenced with the
documents received in respect of the requirements of covering
letter. Ensure that we have obtained the representation letter on
financial statements matters
10. Ensure that the auditors’ report is dated before presenting for
signature to the Partner. This date should not be earlier than the
date financial statements were approved by the Board.
Check in
S. No. DESCRIPTION Appropriate Column
Yes No N/A
The above steps are common for both public and private companies.
In addition to the above the following steps are exclusive for public companies:
12. Ensure that Notice of Annual General Meeting (AGM) has been
received and noted for attendance.
Completed By:
1. Adjustable Events:
Note: Apart from above, also consider above events upto the signing of
audit report but before its issuance and events discovered after
financial statement are issued or when there is any change in
financial statements after it is issued.
(Firm's Name)
Chartered Accountants
(Firm's Address)
Dear Sirs,
This representation letter is provided in connection with your audit of the balance sheet of [name
of Company] (the Company), as of [date], and the related profit and loss account, statements of
cash flows and changes in equity for the year then ended for the purpose of expressing an
opinion as to whether these financial statements give a true and fair view of the financial
position of the company and of the results of its operations and its cash flows in accordance with
the approved accounting standards as applicable in Pakistan and the requirements of the
Companies Ordinance, 1984.
We acknowledge our responsibility for the fair presentation of the financial statements in
conformity with approved accounting standards and the requirements of the Companies
Ordinance, 1984 and we approve the financial statements.
Certain representations in this letter are described as being limited to matters that are material.
We understand that items are considered material if they involve an omission or misstatement of
accounting information that could influence the economic decisions of users taken on the basis
of the financial statements. Materiality depends on the size of the item or error judged in the
particular circumstances of its omission or misstatement.
We have made appropriate inquiries of directors and officers of the Company with the relevant
knowledge and experience. Accordingly, we confirm, to the best of our knowledge and belief,
the following representations:
1. The financial statements referred to above are presented fairly, in all material respects, in
accordance with approved accounting standards as applicable in Pakistan and the
requirements of the Companies Ordinance, 1984.
2. The accounting policies, which are material or critical in determining the results for the
year or state of affairs are set out in the accounts and are consistent with those adopted in
the preparation of the accounts for the previous accounting period.
3. We have made available to you all books of account and supporting documentation and all
minutes of meetings of shareholders and the Board of Directors, and summaries of actions
of meetings held after period end for which minutes have not yet been prepared.
4. We confirm that all transactions entered during the year have been approved at appropriate
level according to materiality levels approved by the Board of Directors.
5. There has been no known actual or possible non-compliance with laws and regulations that
could have a material effect on the financial statements in the event of non-compliance.
6. We confirm that:
(a) We understand that the term “fraud” includes misstatements resulting from
fraudulent financial reporting and misstatements resulting from misappropriation of
assets. Misstatements resulting from fraudulent financial reporting involve
intentional misstatements or omissions of amounts or disclosures in financial
statements to deceive financial statement users. Misstatements resulting from
misappropriation of assets involve the theft of an entity’s assets, often accompanied
by false or misleading records or documents in order to conceal the fact that the
assets are missing.
(c) We have disclosed to you the results of our assessment of the risks that the financial
statements may be materially misstated as a result of fraud.
(d) We have disclosed to you all significant facts relating to any known frauds or
suspected frauds that may have affected the Company [or There have been no
instances of frauds or suspected frauds that may have affected the Company].
9. All sales transactions are final and there are no side agreements with customers or other
terms that allow for the return of merchandise, except for conditions covered by the usual
and customary warranties.
10. Receivables reported in the financial statements represent valid claims against debtors for
sales or other charges arising on or before the balance sheet date and appropriate
provisions have been made for losses that may be sustained on un-collectible receivables.
11. We have no plans or intentions that may materially alter the carrying value or
classification of assets and liabilities reflected in the financial statements. We believe that
the carrying amounts of all material assets will be recoverable.
12. We have no plans to abandon lines of product or other plans or intentions on behalf of the
Company that will result in any excess or obsolete inventory, and no inventory is stated at
an amount in excess of net realizable value.
13. We confirm that we have reviewed all financial assets and liabilities outstanding as of
[balance sheet date] and have correctly classified them as either:
n other financial liabilities in accordance with the requirements of IAS 39, Financial
Instruments: Recognition and Measurement, and that they are appropriately
recorded at their fair value, amortized cost or cost based on their classification.
14. We have accounted for derivatives and hedging activities in accordance with International
Financial Reporting Standards and complied with the applicable hedge accounting,
designation, documentation and effectiveness assessment requirements of these standards.
n whether all transactions have been conducted at arm’s length and at fair
market value;
n whether there are any side agreements associated with any derivative
instruments;
n whether the entity has entered into any written options; and
15. Information regarding financial risks exposure and our financial risk management
objectives and policies has been adequately disclosed in the financial statements, as
required by IAS 32, Financial Instruments: Disclosure and Presentation.
16. Presentation and disclosure of the fair value measurements of material assets, liabilities
and components of equity are in accordance with International Financial Reporting
Standards. The amounts disclosed represent our best estimate of fair value of assets and
liabilities required to be disclosed by these standards. The measurement methods and
significant assumptions used in determining fair value have been applied on a consistent
basis, are reasonable and they appropriately reflect our intent and ability to carry out
specific courses of action on behalf of the Company where relevant to the fair value
measurements or disclosures.
[In addition to the general representation, other situations may exist where more specific
representations may be considered for inclusion. For example, the engagement team may
wish to obtain representations specific to an asset or liability requiring fair value
measurements depending on its nature, materiality and complexity.
n the basis used by management to overcome the presumption relating to the use of
fair value set forth under the entity’s financial reporting framework;
n the completeness and appropriateness of disclosures related to fair values under the
entity’s financial reporting framework;
n whether subsequent events require adjustment to the fair value measurements and
disclosures included in the financial statements.]
17. The Company has satisfactory title to all assets and there are no liens or encumbrances on
the company’s assets, except for those that are disclosed in Note(s) ___ to the financial
statements. Fixed assets are depreciated at appropriate rates to reduce the assets to their
estimated residual value at the end of their expected useful lives. Addition to fixed assets
during the year represent actual capital expenditure and no expenditure of a capital nature
was charged to the operations of the company during the year. Fixed assets sold during the
year were properly accounted for in the books of the company.
18. The following have been properly recorded and when appropriate, adequately disclosed in
the financial statements:
n off-balance sheet activities, including transactions with special purpose entities, non-
consolidation and revenue recognition;
19. We have recorded or disclosed, as appropriate, all liabilities, both actual and contingent,
and have disclosed in Note _____ to the financial statements all guarantees that we have
given to third parties.
20. The estimated financial effect of pending or threatened litigation and claims against the
Company has been properly recorded or disclosed in the financial statements. Except as
disclosed, we are not aware of any additional claims that have been or are expected to be
received.
21. Except as disclosed in the financial statements or footnotes to the financial statements,
there are no:
n other gain or loss contingencies or other liabilities that are required to be recognized
or disclosed in the financial statements, including liabilities or contingencies arising
from environmental matters resulting from illegal or possibly illegal acts, or possible
violations of human rights legislation;
n material transactions that have not been properly recorded in the accounting records
underlying the financial statements;
22. The Company has complied with all aspects of contractual agreements that could have a
material effect on the financial statements in the event of non-compliance.
23. There are no formal or informal compensating balance arrangements with any of our cash
and investment accounts. We have no line of credit arrangements other than those
disclosed in Note ___ to the financial statements.
25. There are no significant matters that have arisen that would require a restatement of the
corresponding figures.
26. We confirm that all the details /assessment orders etc. have been given to you. We also
confirm that adequate provisions have been made including for assessment years where
assessments have not yet been finalized.
27. We have reviewed all estimates and basis used for recording transactions (including staff
benefits), and confirm that the same are reasonable, relevant and consistently applied in
assessing assets and liabilities
28. There have been no events subsequent to the balance sheet date which require adjustment
of or disclosure in the financial statements or Notes thereto, except as disclosed in the
Note ____ to the financial statements. Should any of such events occur between the date of
this letter and the date of AGM we shall let you know.
The engagement team would consider asking management to provide representations with
respect to material matters including matters impacted by:
n management intent;
n the engagement team has an understanding of management’s intent and the relevant
assumptions made with respect to these matters; and
n management has provided the engagement team with all relevant information in
relation to these matters, i.e., that there are no undisclosed issues such as side
agreements that may impact the engagement team’s conclusions about the matters]
Yours faithfully,
Client:
Year end:
Risk Addressed
Recommendation
Period / Year:
Client’s comments:
If no state reasons:
Dear Sir,
We are pleased to inform you that we have completed the audit of your financial statements for
the year ended 30 June 2000, and are enclosing the 5 copies of the financial statements for
identification purposes only. The signed accounts would be issued after we have received the
following:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
We conduct our audit in accordance with the auditing standards as applicable in Pakistan. These
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the above said statements are free of any material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in the above said
statements. An audit also include assessing the accounting policies and significant estimates
made by management, as well as, evaluating the overall presentation of the above said
statements. We believe that our audit provides a reasonable basis for our opinion and, after due
verification, we report that—
(a) In our opinion, proper books of accounts have been kept by the company as required by
the Companies Ordinance, 1984;
(i) the balance sheet and profit and loss account together with the notes thereon have
been drawn up in conformity with the Companies Ordinance, 1984, and are in
agreement with the books of accounts and are further in accordance with accounting
policies consistently applied *2 except for the changes as stated in note(s) with
which we concur;
(ii) the expenditure incurred during the year was for the purpose of the company’s
business; and
(iii) the business conducted, investments made and the expenditure incurred during the
year were in accordance with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given
to us, the balance sheet, *1 profits and loss account, cash flow statement and statement of
changes in equity together with the notes forming part thereof conform with approved
accounting standards as applicable in Pakistan, and, give the information required by the
Companies Ordinance, 1984, in the manner so required and respectively give a true and
fair view of the state of the company’s affairs as at ___________________ and of the *3
profit/loss, its cash flows and changes in equity for the year then ended; and
(d) in our opinion *4 Zakat deductible at source under the Zakat and Ushr Ordinance, 1980
(XVIII of 1980), was deducted by the company and deposited in the Central Zakat Fund
established under section 7 of that Ordinance.
Date Signature
[Name(s) of Auditors]
Place
NOTES
Where applicable—
*1. Substitute “income and expenditure account” in case of association not for profit.
*2. Where there is no change in the accounting policy(ies) the portion “except for the changes
as stated in note(s) with which we concur” may be omitted.
*4. Where no Zakat is deductible, substitute “no Zakat was deductible at source under the
Zakat and Ushr Ordinance, 1980”.
Where any of the matter referred to in the Auditors’ Report is answered in the negative or
with a qualification, the report shall state the reason for such answers alongwith the factual
position to the best of the auditors’ information.
In the case of a non-listed company reference to “cash flow statement or source and
application of funds and statement of changes in equity and opinion thereon may be
omitted”.
We have audited the annexed balance sheet of ____________________ Bank as at the 31st
December __________, and the related profit and loss account, cash flow statement and
statement of changes in equity together with the notes forming part thereof (here in after referred
to as the ‘financial statements’) for the year then ended, in which are incorporated the unaudited
certified returns from the branches except for________ branches which have been audited by us
and we state that we have obtained all the information and explanations which, to the best of our
knowledge and belief were necessary for the purposes of our audit.
We conducted our audit in accordance with the International Standards on Auditing as applicable
in Pakistan. These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of any material misstatement. An audit
includes examining, on a test basis, evidence supporting amounts and disclosures in the financial
statements. An audit also includes assessing accounting policies and significant estimates made
by management, as well as, evaluating the overall presentation of the financial statements. We
believe that our audit provides a reasonable basis for our opinion and after due verification,
which in case of loans and advances covered more than sixty per cent of the total loans and
advances of the bank, we report that:—
(a) in our opinion, proper books of accounts have been kept by the _______________
Bank/branches as required by the Companies Ordinance, 1984 (XLVII of 1984), and the
returns referred to above received from the branches have been found adequate for the
purposes of our audit;
(i) the balance sheet and profit and loss account together with the notes thereon have
been drawn up in conformity with the Banking Companies Ordinance, 1962 (LVII
of 1962), and the Companies Ordinance, 1984 (XLVII of 1984), and are in
agreement with the books of account and are further in accordance with accounting
policies consistently applied *1 (except for the changes as stated in note(s) with
which we concur);
(ii) the expenditure incurred during the year was for the purpose of the Bank’s/branches’
business; and
(iii) the business conducted, investments made and the expenditure incurred during the
year were in accordance with the objects of the Bank/branches and the transactions
of the Bank/branches which have come to our notice have been within the powers of
the Bank/branches;
(c) in our opinion and to the best of our information and according to the explanations given
to us the balance sheet, profit and loss account, cash flow statement and statement of
changes in equity together with the notes forming part thereof conform with approved
accounting standards as applicable in Pakistan, and give the information required by the
Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984
(XLVII of 1984), in the manner so required and give a true and fair view of the state of the
Bank’s/branches’ affairs as at the 31st December, and its true balance of the profit or loss,
its cash flows and changes in equity for the year then ended; and
(d) in our opinion *2 Zakat deductible at source under the Zakat and Ushr Ordinance, 1980
(XVIII of 1980), was deducted by the Bank/branches and deposited in the Central Zakat
Fund established under section 7 of that Ordinance.
Signature
[Name(s) of Auditors]
Date
Place
Notes
Where applicable—
*1. Where there is no change in the accounting policy or policies the portion “except for
changes as stated in note(s)--- with which we concur” may be deleted.
*2. Where no Zakat is deductible, substitute “no Zakat was deductible at source under the
Zakat and Ushr Ordinance, 1980 (XVIII of 1980)”.
*3. Any other matter which the auditor considers should be brought to the notice of the
Members or Directors in case of foreign banks, should also be stated in the report.
Where any of the matters referred to in the Auditor’s Report is answered in the negative or
with a qualification, the report shall state the reason for such answers alongwith the factual
position to the best of auditors’ information.
We conducted our audit in accordance with the International Standards on Auditing. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting policies used and significant estimates made by
management, as well as, evaluating the overall financial statements presentation. We believe that
our audit provides a reasonable basis for our opinion.
(a) proper books of accounts have been kept by the Company as required by the Insurance
Ordinance, 2000;
(b) the financial statements together with the notes thereon have been drawn up in conformity
with the Insurance Ordinance, 2000 and the Companies Ordinance,1984, and accurately
reflect the books and records of the Company;
(c) The financial statements together with the notes thereon present fairly, in all material
respects, the state of the Company’s affairs as at _________________ in accordance with
International Accounting Standards as applicable in Pakistan, and the information required
to be disclosed by the Insurance Ordinance, 2000 and the Companies Ordinance, 1984;
and
(d) Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980),
was deducted by the company and deposited in the Central Zakat Fund established under
Section 7 of that Ordinance.
Notes
1. Where no Zakat is deductible, substitute “ no Zakat was deductible at source under the
Zakat and Ushr Ordinance, 1980”.
2. Where any of the matter referred to in the Auditors’ Report is answered in the negative or
with a qualification, the report shall state the reason for such answers along with the
factual position to the best of the auditors’ information.
We conducted our audit in accordance with the International Standards on Auditing. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting policies used and significant estimates made by
management, as well as, evaluating the overall financial statements presentation. We believe that
our audit provides a reasonable basis for our opinion.
(a) proper books of accounts have been kept by the Company as required by the Insurance
Ordinance, 2000;
(b) the financial statements together with the notes thereon have been drawn up in conformity
with the Insurance Ordinance, 2000 and the Companies Ordinance,1984, and accurately
reflect the books and records of the Company;
(c) The financial statements together with the notes thereon present fairly, in all material
respects, the state of the Company’s affairs as at _________________ in accordance with
International Accounting Standards as applicable in Pakistan, and the information required
to be disclosed by the Insurance Ordinance, 2000 and the Companies Ordinance, 1984;
(d) The apportionment of assets, liabilities, revenue and expenses between two or more funds
has been performed in accordance with the advice of the appointed actuary;
(e) Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980),
was deducted by the company and deposited in the Central Zakat Fund established under
Section 7 of that Ordinance.
Notes
1. Where no Zakat is deductible, substitute “ no Zakat was deductible at source under the
Zakat and Ushr Ordinance, 1980”.
2. Where any of the matter referred to in the Auditors’ Report is answered in the negative or
with a qualification, the report shall state the reason for such answers along with the
factual position to the best of the auditors’ information.
These financial statements are the modaraba company’s (name of the modaraba company to be
indicated) responsibility who is also responsible to establish and maintain a system of internal
control, and prepare and present the above said statements in conformity with the approved
accounting standards as applicable in Pakistan and the requirements of the Modaraba Companies
and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980), and the Modaraba
Companies and Modaraba Rules, 1981. Our responsibility is to express an opinion on these
statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan.
These standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of any material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting policies and significant estimates
made by the modaraba company, as well as, evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis for our opinion and, after due
verification, we report that -
(a) in our opinion, proper books of accounts have been kept by the modaraba company in
respect of …………… modaraba as required by the Modaraba Companies and Modaraba
(Floatation and Control) Ordinance, 1980 (XXXI of 1980), and the Modaraba Companies
and Modaraba Rules, 1981;
(i) the balance sheet and profit and loss account together with the notes thereon have
been drawn up in conformity with the Modaraba Companies and Modaraba
(Floatation and Control) Ordinance, 1980 (XXXI of 1980) and the Modaraba
Companies and Modaraba Rules, 1981, and are in agreement with the books of
accounts and are further in agreement with accounting policies consistently applied
*1 except for the changes as stated in note(s) ……. with which we concur;
(ii) the expenditure incurred during the year was for the purpose of the modaraba’s
business; and
(iii) the business conducted, investments made and the expenditure incurred during the
year were in accordance with the objects, terms and conditions of the modaraba;
(c) in our opinion and to the best of our information and according to the explanations given
to us, the balance sheet, profit and loss account, cash flow statement and statement of
changes in equity together with the notes forming part thereof conform with approved
accounting standards as applicable in Pakistan, and, give the information required by the
Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of
1980), and the Modaraba Companies and Modaraba Rules, 1981, in the manner so
required and respectively give a true and fair view of the state of the modaraba company’s
affairs as at ……………. and of the profit or loss, its cash flows and changes in equity for
the year then ended; and
(d) in our opinion, *2 Zakat deductible at source under the Zakat and Ushr Ordinance, 1980
(XVIII of 1980), was deducted by the modaraba company and deposited in the Central
Zakat Fund established under section 7 of that Ordinance.
Signature
(Name(s) of Auditors)
Date ___________________
Place ___________________
Notes
Where applicable –
*1. Where there is no change in the accounting policy (ies) the portion “except for the changes
as stated in note(s) ……. with which we concur” m ay be omitted.
*2. Where no Zakat is deductible, substitute “no Zakat was deductible at source under the
Zakat and Ushr Ordinance, 1980”.
Where any of the matter referred to in the auditors’ report is answered in the negative or
with a qualification, the report shall state the reason for such answers along with the
factual position to the best of the auditor’s information.”
[ICAP-ATR – 17 (Revised-2004)]
We conducted our audit in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting policies used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements present fairly in all material respects the financial
position of the ___________________ as at ___________________ and of its surplus/deficit
and cash flow for the year then ended in accordance with the approved accounting standards as
applicable in Pakistan.
Place ___________________
[ICAP-ATR – 17 (Revised-2004)]
We have audited the annexed receipt and disbursement account / receipt and expenditure account
of the ___________________as at ___________________together with the notes forming
part thereof (here-in-after referred to as the statement(s) for the year then ended).
We conducted our audit in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the statements are free of material misstatement. An audit includes examining on a test
basis, evidence supporting the amounts and disclosures in the statements. An audit also includes
assessing the accounting policies used and significant estimates made by management, as well as
evaluating the overall presentation of the statements. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note X, the statement(s) have been prepared on the (cash receipts and
disbursements basis / cash receipt and expenditure basis, etc.) of accounting, which is a
comprehensive basis of accounting other than generally accepted accounting principles.
In our opinion the statement(s) present(s) fairly, in all material respect(s), the cash receipt and
disbursement or cash receipt and expenditure, etc. of the ___________________for the year ended
___________________on the basis of accounting described in Note X to the statement.
Place ___________________
Our audit was conducted in accordance with the International Standards on Auditing and
accordingly included such tests of accounting records and such other auditing procedures as we
considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of
__________ and its subsidiary companies as at __________ and the results of their operations
for the year then ended.
Signature
(Name(s) of Auditors)
Date ____________
Place ____________
Note: Where any of the matter referred to in the Auditors’ Report is answered in the negative or
with a qualification, the report shall state the reason for such answers alongwith the
factual position to the best of the auditor’s information.
Client
INDEX
4. Miscellaneous
5.1.5 Prospectus
Other
5.2 Minutes
5.2.3 Other
5.3.1 Loans and Other Agreements of Permanent nature (e.g. long term loans
& lease agreements)
5.3.2 Other
5.4 Miscellaneous
Client:
Period:
I have reviewed the permanent audit file and updated the following as necessary:
Yes / No
Taxation information
12 Chart of Accounts.
17 Engagement Letter.
The following documents have been carried forward to next years audit file.
Signed ______________________
Date ________________________
Manager______________________
Date _________________________