Mcqs
Mcqs
Syllabus
(b) Pre and Post Audit of Claims made by persons and departments
(FEDERAL GOVERNMENT)
VISION
A Model Supreme Audit Institution Adding Value to National
Resources
MISSION
Serving the Nation by Promoting Accountability, Transparency
and Good Governance in the Management and Use of Public
Resources
Integrity
Our way of life
Quality
Core Values Our way of doing
business
Partnership
Our way of
interaction
Table of Contents
3 SCOPE OF AUDIT......................................................................................................................... 12
3.1 Types of Audits ........................................................................................................................................... 12
3.2 Definition of Government Audit .......................................................................................................... 12
3.3 Certification Audit ..................................................................................................................................... 13
3.4 Compliance with Authority Audit ....................................................................................................... 14
3.5 Important Audit Components of Federal Audit............................................................................. 15
3.5.1. Audit of Revenues ...................................................................................................................................... 16
3.5.2. Audit of Expenditures .............................................................................................................................. 17
3.5.3. Audit of Federal Government Transfers .......................................................................................... 18
3.5.4. Audit of Government Debt ..................................................................................................................... 19
3.5.5. Audit of Assets............................................................................................................................................. 22
3.5.6. Audit of Grants ............................................................................................................................................ 23
The Financial Audit Manual (FAM) was commissioned in June 2006 by the Auditor-General of
Pakistan for use in Field Audit Offices (FAOs) for conducting Certification and Compliance with
Authority audits. The Manual is based on the INTOSAI Auditing Standards and the international best
practices. It covers the entire Audit Cycle and provides guidance with regard to the methods and
approaches to audit that can be applied by auditors for conducting the audit of government entities
in Pakistan.
FAM has been implemented in the Department of the Auditor-General of Pakistan (DAG). However,
during the course of its implementation, it was found that the Sectoral Guidelines developed by the
consultants under the FAM project did not provide sufficiently detailed and specific guidance to the
FAOs for conducting audit. As a result, the FAOs continued to rely on their old and outdated codes
and manuals for conducting audit.
On the basis of lessons learnt from the implementation of FAM and its Sectoral Guidelines, it was
decided to revise and update these Guidelines. This has been done with the help of consultants
engaged by PIFRA for different FAOs, and in close coordination with the experienced auditors in the
field. The results of these efforts are contained in these Guidelines. Though the document, as a
whole has been revised, the section on the Audit Execution phase, in which detailed audit steps have
been added is a significant addition.
I hope that the Guideline will prove useful to the FAOs and will go a long way in ensuring quality
improvement in audit reports.
These Guidelines are being issued after the commissioning of the Financial Audit Manual and are to
be used for planning and conducting audits under the mandate of the Department of the Auditor-
General of Pakistan (DAGP).
The Guidelines and the other audit tools are an important foundation for bringing our work in the
line with international best practices. Our auditors will have to apply with dedication the guidelines
provided by the Financial Audit Manual while auditing in the field.
Implementation of the new audit methodology, and adoption of the Guidelines, will be carried out
according to a schedule to be determined by my office according to a gradual phasing across the
government entities that are covered in the audit mandate of the Auditor-General of Pakistan. Since
the implementation of the new audit methodology is contingent upon professional training, it shall
be the responsibility of the heads of the Field Audit Offices to get their personnel fully trained in the
Financial Audit Manual and these Guidelines, with the help of Audit and Accounts Training Institute.
Continued professional training of the officers and the staff of the Department shall remain the main
focus of our efforts towards modernization and professionalism.
Keeping in view the future changes in the international best practices and the changing demands of
the stakeholders, these Guidelines will be required to be updated and expanded. Field Auditors
using these Guidelines are therefore encouraged to make suggestions for improvements in these
Guidelines and other tools on an ongoing basis. Suggestions for improvements will be duly
considered and incorporated in these Guidelines where necessary, by the Research and
Development Wing of the Department of the Auditor General of Pakistan.
(Muhammad Younis Khan)
These Guidelines aim to provide specific and detailed guidance to auditors engaged in the audit of
Federal Government. They do not replace the Financial Audit Manual (FAM) that establishes a
general framework for conducting audit, but complement it. An auditor is expected to continuously
refer to FAM in developing a general understanding of audit concepts, standards and methodology.
The Guidelines assist in their practical implementation.
The guidance provided is primarily meant for Regularity Audit that includes Certification Audit and
Compliance with Authority Audit. Though these audit types have been discussed in detail in FAM
(Chapter 4), they have also been defined in these Guidelines under Scope of Audit (Chapter 3). They
provide specific and detailed set of instructions for an auditor for preparing a permanent file,
planning and conducting audit, which processes finally culminate in the Evaluation and Reporting
Phase of audit results.
FAM, which was issued in 2006 by the Department of the Auditor-General of Pakistan (DAGP) under
the Project to Improve Financial Reporting and Auditing (PIFRA), contains guiding principles that
should be observed at the time of conducting an audit under the authority of the Auditor-General’s
Ordinance, 2001.
Every auditor engaged in government audit is required to be familiar with audit theory, practice,
standards, and techniques described in FAM, which includes the Audit Working Papers Kit. Because
of the importance of ensuring a high standard of work by the DAGP, particular attention needs to be
paid to the quality assurance programme. DAGP’s quality assurance framework ensures that its work
is performed as efficiently and effectively as possible and complies with the INTOSAI Auditing
Standards. Quality is performing an audit effectively, following up all errors and deviations with a
rigorous evaluation, reporting clearly on the results, while at the same time respecting the resource
and time constraints established by the budget. Therefore, quality assurance occurs throughout all
the phases of audit, not at the end. (Ref: Financial Audit Manual Para 15.1.1)
It needs to be highlighted that the audit strategy and methodology, recommended under FAM,
provides for continued quality assurance through all the phases of audit. While reviewing the audit
plan, permanent file and other phases of audit, the functionaries, entrusted with the quality
assurance of audit, should ensure that various steps recommended in these Guidelines and
respective forms have been followed in all respects.
The Director General must ensure that the audit is carried out efficiently, effectively, and with a high
standard of professional competence. This requires auditors to be properly supervised during each
audit assignment. (Ref: Financial Audit Manual Para 9.11.4).
The software tools acquired under PIFRA as a part of the Computer Assisted Audit Techniques
(CAATs) and the Audit Management Software will be required to be used by the audit. For more
information about these software tools, the auditor should refer to the Manuals of the respective
software. In addition, Appendix C of FAM provides a discussion on the use of CAATs.
The Audit Working Papers Kit has been designed to guide audit teams through these phases in a
structured manner, and are presented in the four sets of working papers. Once completed and
supplemented with additional information gathered during the course of audit, each of these sets of
working papers represents a “file” that documents audit activities and supports the conclusions
reached.
The files that represent the work done in each of the phases of audit are:
Permanent file
Planning file
Working Paper file, documenting the execution phase, and the
Evaluation and Reporting file
It is recommended that the electronic versions of forms given in the Audit Working Papers Kit are
used during the conduct of audit. The auditor is reminded of the importance of keeping back-ups of
filled-out forms (electronic and hard copy) to ensure that they are adequately protected.
Kindly note that each form or schedule included in the Audit Working Papers Kit incorporates notes
on how to use the form. These notes are printed in italics to differentiate them from other material
on the form. In some cases, the note may relate to a specific item on the form, in which case it will
follow the item it relates to. Notes that apply to the form as a whole are presented either at the
beginning or the end of the form.
These Guidelines do not repeat the instructions for each form. This purpose is to provide additional
guidance specific to the type of audit being planned or conducted. Forms and schedules given in the
Audit Working Papers Kit essentially meet the requirements of Certification Audit. However, some of
these forms, marked with an asterisk (*), can also be used for Compliance with Authority Audit. In
both the cases, the notes on the form are sufficient to guide the auditor and no additional
information is required in these Guidelines.
Ultimately, it is the audit team leader who will have to use his/her judgment in determining how
best to apply the Audit Working Papers Kit in conducting a specific audit.
The accountability cycle starts with the preparation of annual budget statement which is approved
by the Parliament. A detailed elaboration is as follows:
1. Each year, Ministry of Finance receives budget estimates from government agencies.
2. Based on the resources available and priorities of the government, the annual budget is
prepared.
3. The Parliament approves the budget.
4. Principal Accounting Officers (PAOs) sanction the expenditure.
5. Controller General of Accounts is responsible for the preparation of Annual Financial
Statements. This task is accomplished through the Accountant General Pakistan
Revenues (AGPR), who has the primary responsibility for disbursements, keeping a
record of transactions and the preparation of Annual Financial Statements of the Federal
Government for centralized accounting entities. In the case of self-accounting entities,
this task is accomplished by the PAOs.
6. Each year, the Auditor-General of Pakistan certifies the Financial Statements of
Federal, Provincial and District Governments.
7. Audited Financial Statements and audit reports are laid before the National
Assembly/Provincial Assembly. These reports are then discussed in the Public Accounts
Committee (PAC) who then reports back to the National Assembly/Provincial Assembly.
Legislature
Parliamen
Audit Reports Authorize Bu
CGA Prepares
Accounts
Chapter 2
OVERVIEW OF THE DIRECTORATE GENERAL OF AUDIT
(FEDERAL GOVERNMENT)
Article 169 of the Constitution of Pakistan, 1973 requires Auditor-General to perform such functions
and exercise such powers as determined by or under Act of Parliament in relation to the accounts of
the Federation, Provinces and any authority or body established by the Federation or Province.
Auditor-General's (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001
elaborates the duties of Auditor-General of Pakistan and with respect to Federal Government
requires that Auditor-General of Pakistan should;
In the past Federal Government’s auditing and accounting functions were performed by the
Accountant General Pakistan Revenues (AGPR). Outside Audit Office of AGPR was responsible for
post audit. In 1988, pre and post audit functions of AGPR were separated and Outside Audit Office of
AGPR was institutionalized as a separate Directorate General Audit (Federal Government) “DGA
(FG)”.
The DGA (FG) is presently located at Islamabad with four sub-offices, one each at Lahore, Karachi,
Peshawar and Quetta. The office is headed by a Director General (BPS 20). The details can be seen at
Organogram at the end of the chapter.
DGA (FG) is a strategic audit unit of the Office of the Auditor-General of Pakistan (OAGP). This office
facilitates the Auditor-General of Pakistan to satisfy its constitutional and legislative responsibility of
conducting the audit of Federal Government. DGA (FG) has the primary responsibility to certify the
accounts of the federation. DGA (FG) also conducts audit of Federal Government Ministries/
Divisions. For the audit of Federal Government, consisting of centralized and self accounting entities,
various DG offices are involved. For instance revenue receipts are audited by DG Revenue Receipt
Audit and DG Defence Audit is responsible for the audit of receipts and payments of Defence
services.
Mandate of DGA (FG) includes;
2.2 Jurisdiction
Following is a list of PAOs under the jurisdiction of DGA (FG). The audit entities are categorized
according to the Principal Accounting Officers, who are responsible for maintaining complete record
of transactions and reconciling ministry’s record with that of AGPR.
* Key:
SCOPE OF AUDIT
Directorate General Audit, Federal Government conducts the following types of audit:
1. Certification Audit
2. Compliance with Authority Audit
3. Performance Audit
Additionally the Directorate General also carries out special audit, special studies and the audit of
foreign aided projects. Separate guidelines have been issued by the DAGP for the audit of foreign
aided projects.
The following section defines Certification audit, Compliance with Authority audit and
Performance audit.
According to the INTOSAI Auditing Standards, the full scope of government auditing includes
regularity and performance audit. Regularity audit comprises of the attest of Financial Statements
called Certification Audit and Compliance with Authority Audit. Regularity audit embraces:
1
These guidelines provides guidance on both the Certification and Compliance With Authority Audit.
3. Audit of financial systems and transactions including an evaluation of compliance with
applicable statues and regulations;
4. Audit of internal control and internal audit functions;
5. Audit of the probity and propriety of administrative decisions taken within the audit
entity; and
6. Reporting of any other matters arising from or relating to the audit that the Supreme
Audit Institution considers should be disclosed.
Performance audit2 is concerned with the audit of economy, efficiency and effectiveness and
embraces:
The following sections provide detailed guidance on Regularity Audit which includes
Certification Audit and Compliance with Authority Audit.
Objectives:
1. The Financial Statements properly present, in all material respects, the government’s
financial position, the results of its operations, its cash flows and its expenditures and
receipts by appropriation;
2. Ensure that assessed revenue is promptly collected and deposited in government
treasury and properly classified in the Financial Statements; and
2
Detailed guidelines for Performance Audit have been issued by the DAGP which are being updated under a
special program initiated by PIFRA.
3. The sums expended have been applied in all material respects, for the purposes
authorised by Parliament and have, in all material respects, been booked to the relevant
grants and appropriations.
Financial Statements have a large number of external users and it is necessary that the Financial
Statements properly present the financial position of the auditee. In order to express an opinion on
the Financial Statements, the auditor has to ensure the following:
Methodology:
Objective:
1. Audit against the provision of funds to ascertain whether the moneys shown as
expenditure in the accounts were authorized for the purpose for which they were
spent.
2. Audit against rules and regulation to see that the expenditure incurred was in
conformity with the laws, rules and regulations framed to regulate the procedure for
expending public money.
3. Audit of sanctions of expenditure to see that every item of expenditure was done with
the approval of the competent authority in the Government for expending the public
money.
4. Propriety Audit which extends beyond scrutinizing the mere formality of expenditure
to its wisdom and economy and to bring to light cases of improper expenditure or
waste of public money.
5. While conducting the audit of receipts of the Government, the Auditor-General
satisfies himself that the rules and procedures have been properly adopted and ensures
that the assessment, collection and allocation of revenue are done in accordance with
the law and there is no leakage of revenue which legally should come to Government.
6. Review, analyze and comment on various Government policies relating to different
sectors.
Methodology:
The major focus of the Directorate General Audit (Federal Government) is on:
Fluctuations in Consumer Price Index and exchange rates that can affect the prices of goods,
materials and services consumed by the Federal Government.
Fluctuations in economic conditions that can influence the amount of taxes collected.
Keeping track of assets, protecting their condition and maintaining physical custody of the
assets.
Potential liability for environmental damage or damages due to legal action by persons
impacted by Federal Government activities.
Natural disasters and other unforeseen occurrences that can place demands on the resources
of the Federal government.
Prior year audits audit results that may have a bearing during the current year. Some of the
instances may be;
Over expenditure against one grant and under expenditure against another
Lack of reconciliation
Lack of disclosure of the terms and conditions attached to loans
Need for improved accuracy in reporting
Generation of accounts not timely
Confirmation of expenditure from Principal Accounting Officers and reconciliation by
the DDO not strictly enforced
The auditor should be observant for any possible risks that could affect the financial and operational
performance of federal government. The auditor should decide what aspects of these risks should
be taken into account when planning the audit.
Receipts of money and in-kind contributions through loans and grants should be reviewed to ensure
they have been properly dealt with from a revenue perspective in accordance with Government of
Pakistan accounting standards. The auditor therefore needs to be aware of the current government
policies in this area. The auditor should also conduct an examination of the attached terms and
conditions to ensure compliance. The debt aspect of these loans is addressed below.
There is centralized pre-audit system prevalent in Pakistan, which requires the Ministries, and
Departments of the Federal, Provincial and District Government to get their payments processed
from the pre-audit offices that work under the supervision of the Controller General of Accounts
(CGA) and the control of the Ministry of Finance. Since the payments are processed in the pre-audit
offices, the accounts are also prepared by them and consolidated in the offices of the Accountant
General, which are the field offices of the CGA. In cases where certain departments of the Federal
and Provincial Governments are authorized to maintain accounts, they are required to prepare
detailed accounts of their payments and receipts, which are merged with the central accounts
prepared by the Accountant General.
The overall payment process of the federal government at Accountant General Pakistan Revenues is
illustrated below;
3.5.3. Audit of Federal Government Transfers
Federal Government transfers to other levels of government should be examined as part of the
certification of the financial statements. A specific audit program on this topic, the audit program on
transfers, is provided in the Working Papers Kit of FAM.
Federal Governments may, subject to their legal powers, finance their operations through
borrowings from various sources.
The following types of financial liabilities have been identified by INTOSAI3 as areas for audit
attention:
The auditor should review the Federal Government’s debt management policy, especially how it
addresses the following key debt management issues:
3
“Guidance on Definition and Disclosure of Public Debt” issued by INTOSAI
Procedures for ensuring expenditures against loans are consistent with the purposes of the
loans; and
Distinguishing whether expenditures against loans are for capital investment or for operating
purposes.
In addition to the audit of debt management from a strategic perspective, the auditor needs to
examine the internal controls and individual debt transactions. The auditor is referred to the Audit
Program on Debt in Chapter 6 of this guideline.
The New Accounting Model (NAM) provides for the accounting of assets. The auditor needs to
understand the level of implementation of NAM and verify the fair and true presentation of those
assets in accordance with the policy given in NAM.
Government entities receive budgetary grants from the Federal Government annually. AGPR
maintains grant files for each grant in which all relevant record of the grant including reconciliation
statements of all DDOs, supplementary grants and re-appropriations etc. are maintained. The
auditor should review the following with respect to government grants;
PERMANENT FILE OF
AUDITEE DEPARTMENTS
4.1 Introduction
Audit objectives and plans are developed based on an understanding of the entity’s operations. The
auditor needs to have a detailed knowledge of those aspects of the entity that relate to audit; the
auditor should have cognizance about the other areas.
As its name implies, the Permanent File (PF) is used to collect information about the entity that will
be useful not just for the current audit, but also for future audits of the same type for the same
entity. For example: information about the entity’s size and business helps in assessing materiality;
understanding the entity’s operations can help to determine what components to audit; and,
knowing the types of transactions entered into by the entity helps to assess inherent risks to the
entity. This information will be fairly consistent and relevant for at least a few years’ audits.
Even though the information on the Permanent File is expected to be useful across more than one
audit periods, the audit team should validate the accuracy of that information at the time of next
audit and update the Permanent File where significant changes have occurred.
The Permanent File includes information that will be of continuing importance to audit. This may
include:
Note: Where the supporting documentation is voluminous, the auditor may decide to include only
a reference to the title of the documentation and its physical location rather than keeping the
whole document in the Permanent File.
The audit team is responsible for gathering the information required to be put in the set of working
papers associated with the Permanent File. These are listed in the next section. The preparation of
Permanent File for the first time will be a time-consuming exercise and sufficient audit resources
should be allocated to this task in the audit resource plan.
For subsequent audits of the same type for the same entity, the audit team simply needs to confirm
that the information is still relevant, and to update the Permanent File at planning stage where
necessary. The dates on which updates occurred should be recorded on the Update Control Sheet
(Form PF) provided.
Members of the audit team should be familiar with the information in the Permanent File as it is
required to have an understanding of the entity’s business in order to check that an effective and
efficient audit is conducted.
It needs to be highlighted that the audit strategy and methodology recommended under FAM
provide for continued quality assurance through all the phases of audit. While reviewing the
permanent file, the functionaries entrusted with the quality assurance of audit should ensure that
the various steps recommended in these Guidelines and respective forms have been completely
followed in all respects.
4.3 Documentation in Permanent File
Titles of various forms specified in the Audit Working Papers Kit are listed below:
The following paragraphs provide general guidance for using the above mentioned forms.
Instructions for filling in these forms are contained in the Audit Working Papers Kit which the
auditors are required to follow.
The Permanent File should be updated each year at the planning stage. This form should document
the name of the person responsible for updating it.
The auditor should gather financial and other background information about the operations whose
results are included in the Financial Statements of the entity. This includes information about total
assets, total liabilities, total revenue and total expenditure, corporate plans, and organization
structure, main functions, etc.
The main functions of auditee departments generally are:
The auditor should list names, addresses and account numbers of all bank accounts maintained in
the name of the Federal Government, its Ministries, agencies and other related organizations.
State Bank of Pakistan (SBP) is the banker of the Federal Government. SBP has 16 branches and
National Bank of Pakistan (NBP) as an agent of SBP performs banking function for the Federal
Government across Pakistan.
Non-food account
Food account
Fertilizer account
Saudi Arabia special loan account
Government deposit account No. XII
Non-food account is the main account of the Federal Government and government receipts are
deposited in this account and majority of payments are made from this account.
The auditor should list external factors that may have an impact on the performance of the
operational activities of an auditee. The auditor should use professional judgment to decide what
these factors are. They may include:
a. List the accounting records maintained by the auditee departments for the collection,
recording, processing and reporting of financial information of all the formations at the
Federal, Provincial and District accounting levels.
b. Document a brief description of the accounting system (the means, including staff and
equipment, by which an organisation produces its accounting information).
The major accounting records maintained by the auditee departments include:
Cash Book
List of Bank Accounts
Cheque Book
Vouchers/Bills
Expenditure Statement
Monthly Return
Funds Releases
Budget Releases
Transfer Register
Advance Register
Expenditure Register
Stock Register
Vehicles Record
Accounting Ledgers
Note: The above list is not comprehensive; it may include other additional records to support the
nature of activities an auditee is involved in.
In addition to the above mentioned list, the following is the list of manuals and codes which are
entity specific;
Where there are new administrative policies or procedures with which the auditee departments
should comply, the auditors must become familiar with them and check that the audit is conducted
against these benchmarks. In addition, the auditor should consider whether the policies and
procedures in force are effective at reinforcing good management practices. Where a rule or
procedure does not contribute to good management practices, it is the job of the auditor to
recommend changes to such rules and procedures.
The audit team should also document a process mapping for each process maintained for collecting
and recording transactions. This will help the auditor in understanding the complexity of control
structure and documentation. The process mapping will depend on the nature, flow of transaction
and significance of operations. For process mapping, the audit team may analyse an entity’s
manuals, applicable rules and regulations. There are two approaches to process mapping namely
Financial Statements approach (a top down approach) and transactions based approach (a bottom
up approach).
Note: It is most important that the auditor, in carrying out the audit work, does not reinforce
outdated or inappropriate procedures and practices. In particular, the auditor should
determine whether any changes have been introduced in government practices that will
apply to the auditee department(s).
The auditor should list the names and contact information of key personnel at the principal
accounting office and at the departmental levels of each of the Ministries, departments, agencies
and other related organizations of the Federal Government.
The auditor should obtain a current and up to date chart of accounts. He/she should ensure that it
follows the current accounts classifications and the regulations imposed by the Controller General of
Accounts (CGA).
The auditor should list critical audit areas/significant financial statement components (including
individually significant transactions and events), and their impact on the Financial Statements of the
Federal Government (in liaison with those auditors having responsibility for these audits). This will
help the auditor to plan his/her audit for specific Financial Audit and related Compliance with
Authority Audit objectives.
For certification audit, the most logical way of dividing up the Financial Statement is to consider each
line item in the Financial Statements to be a separate component. The line item would be each
amount reported in the Financial Statement, including the amount disclosed in the notes thereto.
1. Income
a. Tax Receipts
b. Non-Tax Revenue and Other Receipts
i. General Administration Receipts
ii. Economic Services Receipts
iii. Defence Services Receipts
iv. Development Surcharge and Royalties
v. Citizenship, Nationalization, Passport and Copyright
vi. Interest on Loans and Advances
vii. Dividend and Profit Share
c. Development Grants
d. Borrowings
i. Foreign Debt
ii. Domestic Permanent Debt
iii. Domestic Floating Debt
e. Capital Receipts
i. Privatization Proceeds
ii. Recovery of Loans and Advances
iii. Investment Recovery
2. Expenditures/Costs
a. Salaries and Employee Benefits
b. Operating Expenses
c. Transfers
i. Grants, Subsidies and Write-off of Loans
ii. Other Transfer Payments
d. Expenditures on
i. Physical Assets
ii. Civil Works
iii. Debt and Interest Payments
iv. Principal Repayment of Debts
v. Servicing of Debts
e. Other Payments
i. Loans and Advances
ii. Investments
3. Public Account
a. Receipt and Payment of
i. National Saving Schemes
ii. Deposits
iii. State Provident Fund
iv. Other Public Accounts
The auditor should list significant accounting policies that are consistently applied in the auditee
department and should verify that these are consistent with the current policies implemented by the
CGA. The auditor should specifically check on the extent of the application of NAM in the auditee
entity.
a. Revenue recognition
b. Recognition of expenditure
i. Payments made through cheque
ii. Inter government transfers
iii. Payments directly in bank accounts
iv. Direct payments by State Bank of Pakistan (SBP)
v. Imprest payments
c. Foreign currency transactions
d. Employee benefits
i. General Provident Fund
ii. Pension
e. Investments
f. Public Debt
g. Payments by third parties
A number of entity-supplied documents are required to support the forms and schedules:
Organization chart
Accounting policies
Chart of accounts
Entity’s business plan or charter
Applicable financial rules, laws and regulations, and service rules
Environmental laws and regulations
Long term contracts and leases
Loan agreements, mortgages and debt instruments
Amortization schedules for major assets
Extracts of minutes of meetings
Previous years’ audited financial statements
Previous auditors’ reports to management and management’s responses
Other as appropriate
Note: Where the supporting documentation is voluminous; the auditor may decide to include only
a reference to the title of the documentation and its physical location rather than keeping the
whole document in the Permanent File.
A sample of the permanent file prepared for the National Electric Power Regulatory Authority
(NEPRA) has been annexed as Appendix – A.
Chapter 5
5.1 Introduction
Under the existing guidance available to the Field Audit Offices (FAOs), all the FAOs are required to
prepare an Annual Corporate Audit Plan covering audit operations pertaining to Certification Audit,
Compliance with Authority Audit and other audits like Performance Audit, Special Audit, Special
Studies and Audit of Foreign Aided Projects. This chapter contains guidance that the auditor can use
to plan their Regularity Audit which includes Certification Audit and Compliance with Authority
Audit. These guidelines do not replace the use of professional judgment.
* These steps of Planning Phase are common for both the Certification and Compliance with
Authority Audits, whereas the unmarked steps relate to Certification Audit only.
The activities performed during the preparation of the Planning File are complex and varied. Each
member of the audit team should check that they have a good understanding of the activities that
have been assigned to them. For details, please refer to Chapter 7 of the FAM.
Based on the information noted above, head of the office is responsible for planning the activities
and associated resource requirements in conducting audit. The Audit Management Software is a
valuable tool to apply to this task. See Chapter 8 of the FAM and the Audit Management Software
Manual for additional information.
It should also be noted that the INTOSAI Auditing Standards require that “Auditors should
adequately document the audit evidence in working papers, including the basis and extent of
planning, work performed and the findings of the audit”. Therefore, the audit team leader is
responsible to check that the Planning File is complete and provides evidence of the basis and extent
of planning work performed by the audit team.
It needs to be highlighted that the audit strategy and methodology recommended under FAM
provide for continued quality assurance through all the phases of audit. While reviewing the
planning phase, the functionaries entrusted with the quality assurance of audit should ensure that
the various steps recommended in these Guidelines and respective forms have been completely
followed in all respects.
The key to maintaining the quality of the planning process itself is a review of the plan, which the
concerned Deputy Auditor General (DAG) should supervise and approve (Ref: FAM-Para 15.3).
Note: These forms recommended under FAM and Audit Working Papers Kit essentially meet the
requirements of Certification Audit. However, some of these forms, marked with asterisks(*),
can also be used for Compliance with Authority Audit.
The following paragraphs provide general guidance for using the above mentioned forms.
Instructions for filling in these forms are contained in the Audit Working Papers Kit which the
auditors are required to follow.
The audit is conducted to address a particular objective. Each audit will be designed to address one
or more of the following objectives:
Expressing an opinion on Financial Statements;
Expressing an opinion regarding compliance with current rules and regulations;
Testing compliance with authority or controls on selected transactions with no
opinion being expressed; and
Evaluating operational performance.
Note: For a comprehensive discussion of audit objectives, please see Section 7.1 of FAM.
The nature and size of the audit entity determines the scope of the audit and is generally defined by
the audit mandate. For the audit of Financial Statements, that are required under Section 7 of the
Auditor-General Ordinance, 2001, the entity to be audited will be defined by the applicable
accounting policies of the government.
The purpose of this form is to highlight matters that should be taken into account when planning the
following year’s audit. The auditor should record expected developments in the entity’s activities
that may require changes in the audit planning. This form can also be used to document practical
suggestions for changes to the next year’s audit. All audit staff are encouraged to suggest
improvements in the audit plan and procedures.
The Audit Working Papers Kit includes the template of a letter which needs to be issued to the
management of the auditee. It sets out the terms of the audit and will include the issues that the
auditor wants to bring to the attention of entity’s management. This letter will clarify what is
expected from auditors during the course of audit and leads to cooperation between both the
parties.
The audit planning memorandum should comprise a concise and easy to understand summary of
important factors and decisions made during the planning phase. Emphasis should be placed on
changes that have been made to the previous year’s plan. The audit planning memorandum should
not duplicate all of the details set out elsewhere in the planning file, the permanent file or in the
audit programmes.
The actual contents of the audit planning memorandum will depend on specific circumstances of the
audit. It should include any changes in the nature of entity’s business, structure of business,
accounting policies or systems, internal controls or operational environment that will affect the
planned audit. It should also explain and establish an audit strategy, time tables and overall budget
together with any significant changes made from the previous year.
As the execution, evaluation and reporting phases of the audit proceed, it may be necessary to
amend the planned scope of the audit work. This may result from gaining a better understanding of
the entity’s activities, from unexpected external developments, or from determining a better means
of achieving the audit objectives as the audit progresses.
If the changes are significant, such as the one that calls for the development of new audit
programmes or a re-consideration of the sources of audit assurance, the auditor should discuss the
situation with his/her supervisor. The auditor should then prepare an addendum to the audit
planning memorandum. This addendum should follow the same review and approval process as is
used for the audit planning memorandum itself.
Each audit is scheduled around a number of important dates. This form lists dates that are likely to
be significant and provides the audit team leader with a tool to track when the work was planned
and when it was actually performed.
Tour programme needs to be prepared and approved keeping in view the timelines, resource
constraints and audit strategy. The head of office should ensure that tour programmes are prepared,
and approved well in time; and appropriate record is being kept in this regard.
Materiality can be defined as follows: “An error (or the sum of the errors) is material if the error (or
the sum of the errors) is big enough to influence the users of the Financial Statements”.
Assessing materiality is an important aspect of modern systems-based audits. This form provides
guidelines and suggestions for assessing an appropriate materiality amount for the audit at hand.
Note: For a comprehensive discussion on Materiality, see section 7.3.l and Appendix D of FAM.
Other values which are important in determining appropriate sample size and in evaluating the
results of the audit are expected aggregate error and planned precision. This form provides detailed
instructions for arriving at these values for the audit at hand.
It is important that the audit team establish an appropriate level of risk for the audit. The concept of
risk is very important in planning system-based audits and is discussed in detail in sections 7.7 and
7.8 of FAM. This form is used to identify whether there are any particular factors that would cause
the auditor to reduce the level of risk he or she is willing to accept, therefore requiring additional
audit work to be planned so as to raise the level of audit assurance.
This form indicates some factors which may influence the auditor’s assessment of inherent risk.
Inherent risk should be assessed for each Financial Audit and compliance with authority objective.
However, because the auditor’s assessment of inherent risk may be the same for multiple objectives
or components, this form can be used to capture risk for each group of objectives or components
that the auditor wishes to treat in the same manner.
This form is used to guide the auditor in considering the overall internal control environment in the
entity. The better the apparent system of internal control, the less detailed checking of individual
transactions will be necessary. Internal controls are discussed at length in section 7.4 of FAM.
The internal control questionnaire provides many questions for the auditor’s review. The auditor
should decide what questions are relevant to the present audit and is free to add further questions
wherever required.
Also, the auditor should be aware of the work carried out by the Internal and external auditors
where applicable. Reliance on their work can only be placed when the auditor assures him/herself
that their work has been carried out according to the relevant auditing standards. The auditor
should make efforts to obtain the copies of the audit reports, management letters and other
relevant observations made by the internal and external auditors. Wherever the auditor uses the
work of the internal and external auditors, it should be duly acknowledged in his record.
The auditor must be honest in the assessment of internal controls operating in overall environment,
general computer environment and specific computer based financial applications. If the controls
are weak or non-existent, the auditor should inform the entity management of the need to make
improvements and should also offer suggestions. In the first few years of transition to the new
auditing paradigm, it is to be expected that the control environment will be weak in most entities.
Identifying the weaknesses will be the starting point for developing stronger controls for the future.
5.17 Internal Control Questionnaire – General Computer Controls
This form is used to guide the auditor in considering the internal controls operating in the entity’s
computerised environment. Internal controls are discussed at length in section 7.4 of FAM.
The internal control questionnaire provides many questions for the auditor’s review. The auditor
should decide what questions are relevant to the present audit and is free to add further questions
wherever required.
This form is used to guide the auditor in considering the internal controls operating in specific
computer-based financial applications. Internal controls are discussed at length in section 7.4 of
FAM.
The internal control questionnaire provides many questions for the auditor’s review. The auditor
should decide what questions are relevant to the present audit and is free to add further questions
wherever required.
This form is used by the auditor to summarise the assessment of risk in the general control
environment, the overall computer environment and in specific computer applications (from the
previous three forms).
The risks identified through the assessment of controls may impact different components
differently, so the auditor should consider control risk separately for each component (or group of
similar components). The assessment of risk is very much a matter of professional judgment. In
general, during the first few years following the introduction of new auditing paradigm, it is
suggested that all control risks are assumed to be high unless there is sufficient evidence to support
lowering that assessment.
5.20 Analytical Procedures Assurance Form
The audit team leader uses this form to document the analytical procedure(s) that are planned for
each component. The type of procedure selected is important as different procedures (i.e.
comparative, predictive, statistical or overall verification procedures) provide a different level of
assurance when it comes to planning substantive tests of details.
Note: A detailed discussion on analytical procedures is provided in the Financial Audit Manual,
section 7.8 and Appendix E.
In conducting audit, the audit team is looking for sources of assurance that the Financial Statements
provide a true and fair view. One source of assurance is a detailed review of individual transactions
(substantive tests of detail). However, this is very time consuming, so the audit team looks for other
sources of assurance that might enable them to reduce the amount of substantive tests of detail.
The audit risk model provides an arithmetic method of using the assessments of inherent risk,
control risk, analytical procedures and overall audit risk to arrive at the level of assurance that is
required from substantive tests of detail.
This form leads the auditor through this arithmetic model. A detailed discussion of the risk
calculation is presented on the reverse of this form.
A major component of a Regularity Audit is the verification that the entity has complied with
applicable laws and regulations. The audit team should enlist all applicable laws and regulations on
this form for checking the entity’s compliance with laws and regulations.
The following section lists some of the sampling techniques which can be used both for the
Certification Audit and for the Compliance with Authority Audit. Use of Monetary Unit Sampling is
recommended for Certification Audit and when the auditors use alternative sampling techniques
during Certification Audit, they will be required to exercise professional judgment.
Sampling:
Sampling risk
Sampling risk is the chance that a sample is not representative of the population from which
it was selected.
Statistical sampling
Statistical sampling is the selection of a sub-set from a population in such a way that each
sampling unit has an equal and known chance of selection.
Non-statistical sampling
Non-statistical samples are samples selected by other means which are intended to
approximate the representative character of a statistical sample. However, they lack the
objectivity of a statistically selected sample.
Note that the only difference between statistical sampling and non-statistical sampling is the
method of selecting sample items. Planning requirements and the evaluation process remain
the same.
Under MUS, all sampling units (individual Rupees) will have the same chance of being
selected. This means that, the larger the supplier invoice, the greater the chance of it being
selected.
There are several sample selection methods that are very good at ensuring that the sample
is representative of the population from which it is selected, as follows:
1. Random;
4. Stratified random.
1. Random selection
Random selection involves numbering all of the items in the population and then using a
random number table or software programme to select 200 random numbers. The auditor,
then, identifies the sampling unit that corresponds to each number. This method is difficult
to use unless the sampling units are already pre-numbered (pre-numbered sales invoices, for
example) or can easily be numbered
This method involves selecting a random start and then every nth item.
CAATs may offer a fourth method – stratified random sampling. Using this approach, the
population is first stratified based on monetary ranges, type of expenditure, etc., and then a
random sample is drawn from each range. This could be used, for example, to weight an
attribute sample to the larger dollar items or specific expenditure types, or to ensure that at
least one sample item is drawn from each expenditure type.
The “standard” sample selection technique with MUS is fixed interval (systematic) selection.
Cell (random interval) selection can also be used if the population has been downloaded into
a computer and a CAATs is being used to do the selection. Random selection is also possible,
but contains all of the difficulties of cell selection. In addition, it has a further disadvantage –
should fixed interval or cell selection be used, the sample size will automatically be adjusted
for any over or under-estimations of the population value. With random selection, this will
not occur. Hence random selection is rarely used with MUS. For both fixed interval selection
and cell selection, the auditor needs to know the sampling interval.
To select a non-statistical sample that approximates a monetary unit sample, the auditor
needs to find a way to bias the sample towards the larger monetary items. Some form of
value-oriented selection is therefore required.
In addition to selecting a random sample for testing, the auditor should also make sure that the
items of particular high value are tested, as any errors in these items could have a material impact
on the accuracy of the Financial Statements as a whole. Therefore, the auditor will identify the high
value items which will receive individual attention (and will remove them from the population of
items from which the samples are selected).
The auditor will identify the high value items on this form and will cross-refer each item to the
working papers that record the audit tests performed on that item.
As with high value items, the auditor may also want to individually review items which are unusual
and which warrant special attention. Generally, these items will include transactions that cause an
account to show a negative balance (e.g. an asset account with a credit balance) or unusual non-
recurring items. The auditor will use judgment and experience to help identify these key items.
Therefore, the auditor will identify the key items which need individual attention and will remove
them from the population of items from which the samples are selected.
The auditor will identify the key items on this form and will cross-refer each item to the working
papers that records the audit tests performed on that item.
This form presents a manual arithmetic process for determining the appropriate size of a sample of
transactions which will be selected to test the controls in a specific audit component. The process is
the same for all audit entities, and is fully explained on the form.
The use of CAATs (see Financial Audit Manual, Appendix C) will avoid having to follow this manual
process.
The use of CAATs (see Financial Audit Manual Appendix C) will avoid having to follow this manual
process.
During the course of preparation of Planning and subsequent Working Paper files, the auditor may
come across items in the current year that should be followed up in the next year’s audit. These may
be accounting estimates that were contingent upon events that have not yet happened or items that
are expected to show up in the following year’s accounts or other matters specific to the audit at
hand.
Use this form to record these items so that they can be reviewed in next year’s audit planning phase.
This form presents a checklist of the major activities that should have been completed by the audit
team leader to meet his responsibility for adequately planning audit and for documenting the basis
of the plans. Chapter 8 of FAM provides detail regarding the auditor’s planning responsibility.
This form is also a key component of the DAGP’s quality assurance process, since it provides a
vehicle for communicating the planning process to the DAGP management so they can review and
approve that adequate planning was completed in respect of the audit.
5.31 Centrally Led Audit
These are audits where a central team is responsible for the overall planning, performance,
evaluation, reporting and follow up. With a centrally led audit, there will be a division of
responsibilities between the central team and the field audit teams of the same Directorate or of
other Directorates contributing to the centrally led audit.
An example of such an audit is the annual audit of the Financial Statements of the Federation
Government. In total eight Directorate Generals Audits are involved in the audit of Federal
Government in one way or another. Directorate General Audit (Federal Government) has the prime
responsibility to form a consolidated opinion on the Financial Statements of the Federal
Government. Further four self accounting entities are also included in the scope of Federal Audit are;
Pakistan Mint
Central Directorate of National Saving
Food Account
Geological Survey of Pakistan
Paras from 6.4.5 to 6.4.10 of FAM give guidance about a centrally led audit. The central team is
responsible for:
Setting the basic planning parameters (materiality, planned precision, audit risk, etc.);
Setting inherent risk, control risk, other substantive procedures risk and substantive
test of details risk for each component and each specific Financial Audit objective,
Compliance with Authority Audit objective and error condition;
Determining the optimum mix of tests of internal controls, analytical procedures and
substantive tests of detail for each component and for each specific Financial Audit
objective, related Compliance with Authority Audit objective and error condition;
Performing the overall error evaluation; and
Reporting the results of the audit.
The field audit teams of the same or other Directorates are, in turn, responsible for:
6.1 Introduction
This chapter provides guidance for the auditors’ work at the execution stage. This stage includes
compliance testing (test of controls), substantive testing, collecting and reviewing evidence and
maintaining working papers files. It needs to be noted that the audit programmes given at the end of
this chapter provide guidance to the field auditors for Certification Audit and Compliance with
Authority Audit. However, there are very few audit programmes as ‘compilation of accounts’ which
relate specifically to certification audit.
Evidence that the auditor has complied with the DAGP auditing standards;
A basis to determine that the work delegated has been performed properly;
A source of information for preparing reports and answering enquiries; and,
Assistance in planning and executing future audits.
As noted in FAM, the content and arrangement of the working papers is a reflection of an auditor’s
proficiency, experience and knowledge.
Sections 9.9 to 9.11 of FAM provide details of the auditors’ responsibility for documenting the work
performed and standards for maintaining and keeping custody of the Working Papers file. Each
auditor should be familiar with these responsibilities.
The Audit Working Papers file should contain various financial documents provided by the auditee
management, including:
a. Financial Statements
b. Trial balance
c. Civil Account
d. Appropriation Account
e. Any inter-governmental accounts for elimination.
f. Supporting documents (important agreements, bills, vouchers other documents that
are important for the audit record)
g. In addition, the audit team should maintain detailed minutes of all the meetings with
the auditee representatives, which should be placed in the Audit Working Papers file.
It needs to be highlighted that the audit strategy and methodology recommended under FAM
provide for continued quality assurance through all the phases of audit. While reviewing the
execution phase, the functionaries entrusted with the quality assurance of audit should ensure
that the various steps recommended in these Guidelines and respective forms have been
completely followed in all respects.
Titles of various forms specified in the Audit Working Papers Kit are listed below:
The following paragraphs provide general guidance for using the above mentioned forms.
Instructions for filling in these forms are contained in the Audit Working Papers Kit which the
auditors are required to follow.
This form is used to summarize the analytical procedures that were performed. The auditor should
note the procedures that were performed and cross-refer each procedure to the working paper that
provides the details of the test (i.e. Details of Analytical Review Procedures Performed form)
Details of each analytical review procedure conducted by the audit team, including type of test, data
used, calculations performed, results and auditor’s conclusion, are documented on this form.
The auditor must test the control environment to determine whether the system of internal controls
on which the audit team intends to rely is actually working effectively. This is done by following the
detailed guidance provided in the Internal Control Questionnaires for different aspects of the audit.
The auditor will select the ICQs that are to be used in this audit and tick them off on the checklist
provided. The auditor does not have to apply all the possible ICQs in every audit.
Note: Detailed guidance for filling in the ICQ’s is provided in the Audit Working Papers Kit under the
section Execution file.
Where the operations of the auditee organisation are decentralized, it is important to assess which
weaknesses are due to scattered nature of department/policy weaknesses and which are due to the
inadequate application of these internal control systems and policies within the decentralized sites
being audited.
The auditor must test the sampled transactions to identify the incidence of errors in the sample. This
is done by following the detailed guidance provided in the Audit Programmes for different aspects of
federal audit given at section 6.16 onwards of this chapter under the heading Audit Programmes.
The auditors are expected to select the relevant audit programmes for each audit as they do not
have to apply all the possible Audit Programmes in every audit.
The substantive testing section of the Audit Programmes includes a basic set of audit objectives,
which are described below:
Audit Objectives:
To determine whether, on the basis of the transactions examined (selecting a representative sample
of transactions or other form of sample), the entity’s Financial Statements complies with the
following assertions4:
The key Audit Programmes for this purpose are given under section 6.16.
6.14 Details of Errors in Samples, High Value Items and Key Items
The auditor will complete one copy of this form for every single error discovered in any of the
substantive tests of details (from sampled transactions and High Value Items and Key Items). Details
of the voucher on which the error occurred, the nature and cause of the error and its value should
be documented on this form.
4
Another set of assertions commonly used are: Existence / Completeness / Valuation / Rights and Obligations
(or Ownership) / Presentation and Disclosure. The set used in these Guidelines is more appropriate for the audit
of transactions in the public sector.
6.15 Exit Interviews
Section 9.8 of FAM stresses the importance of keeping entity officials informed during the course of
audit. In addition to open communications during audit, it is a good practice to arrange a meeting
with senior entity management at the end of the fieldwork at each location.
The audit of decentralized sites, remote from the Audit Office (out of which the audit team
operates), is complicated by the fact that briefing of the management at the site cannot be done
after the senior audit management has reviewed the audit findings. This means that the team
should provide feedback to management at the decentralized site prior to conducting a full review of
findings. It is a good practice for the audit team leader to determine whether there are any sensitive
issues that need to be brought to the attention of senior audit management prior to discussing with
entity management at the site. Where potentially sensitive matters are involved, the audit team
leader should get instructions from senior audit management before the exit briefing.
The Audit Programmes given in this section cannot provide an exhaustive set of checks. Although in
certain cases specific references to the current rules and regulations have been given in the audit
programmes, it needs to be noted that the auditor should be familiar with the operations of the
audit entity and should have a sound knowledge of the relevant laws, regulations and rules with
which the transactions must comply. This will allow him/her to make appropriate adjustments to the
audit programme guides. Furthermore, if the audit programmes do not cover the auditor’s
requirements, he can add an audit work sheet on which he notes the details of transaction(s)
(revenue/expense /investment etc), his audit procedure(s) and findings. The audit programmes have
been developed by keeping in view the risks mentioned in 3.5.
6.17 Audit Programme – Employee Related Expenses
Date(s) Conducted:
WP
Audit Procedure Done By:
Ref.
Existence and Occurrence
Completeness
Joiners:
1. Check that the job was properly requisitioned by the relevant
department and all process including advertisement was
completed in a transparent manner in accordance with relevant
rules and regulations.
2. Check that the salary and grade for the employee has been
fixed according to the relevant HR rules and regulations.
3. Check that a Medical Certificate acknowledging the fitness of
the employee has been issued by the Medical Officer {FR-10}
4. Check that the appointment letter of the employee has been
signed by the relevant authority.
5. Check that the personal file of the employee contains the
following;
o Application and CV of the employee
o ID Card
o Experience Certificate (if any)
o Appointment letter
o Joining report
WP
Audit Procedure Done By:
Ref.
o Medical certificate
o Leave applications (if any)
6. In case the age of appointee is more than 60 years check that
the appointment has been made in accordance to finance rules
for appointment after superannuation age.
Resignations& Terminations:
Superannuation Age
Date(s) Conducted:
Done WP
Audit Procedure
By: Ref.
Existence and Occurrence
Engagement of consultants
Check that:
1. Consultants were selected after advertisement in the press.
2. Criteria for pre-qualification were clearly defined.
3. Both technical and financial proposal were evaluated.
4. Selection was made on merit.
5. Consultants were appointed as per approved policy and guideline
issued by the Govt. {Rules 8, 12 & 15 of PPR 2004}
Engagement of contractor
Check that:
Tendering
Check that:
Done WP
Audit Procedure
By: Ref.
Date(s) Conducted:
Done WP
Audit procedure
by Ref.
Approval of investment decision
1. Check that all investments have been properly recorded in the books of
accounts. Compare the investment schedule with the ledger and bank
records.
2. Explain movements and investigate any unexpected or unusual
relationship between current period and prior period accounts.
3. Compare investment held at year end with prior year and budgeted
amounts and enquire the variances.
4. Check that income from investment has been accounted for correctly.
Perform recalculation of income on investment.
5. Check that the investment has been properly classified.
1. Non government debt instruments should have a major rating category of “A” and above.
2. Public listed shares/units should have a total return comprising the dividend paid and
appreciation in value, which exceeds the average six months treasury bill rate for the last
three years, the formula for the calculation of the total return would be provided by the
Securities and Exchange Commission of Pakistan from time to time.
3. Initial public offering (IPO) of shares of existing companies should have a track record of
three year profitability at least equal to the average of twenty best performing companies
on Karachi Stock Exchange.
4. Total investment in debt instrument of a company not to exceed 10% of size of the issue or
10% of the total size of funds managed by the public sector entity, whichever is lower.
5. Total investment in the shares of a company not to exceed 5% of the paid up capital of that
company or 5% of the total funds managed by the public sector entity, whichever is lower;
and
6. Investment in shares of Greenfield projects/companies will not be eligible.
Date(s) Conducted:
WP
Audit Procedure Done By:
Ref.
Existence and Occurrence
1. From the debt register of foreign debt (obtained from EAD), select
large debt obligations.
2. Similarly, from the schedule of domestic borrowing (obtained from
Finance Division, Internal Finance Wing) select large debt
obligations.
3. Obtain the corresponding documents (original agreements and all
amendments) for these debt obligations.
4. Alternatively, or additionally, select loan payments from ledger and
trace back to debt obligations.
5. Inspect supporting documents for subsequent realization or
settlement after the end of the reporting time period.
Completeness
Measurement
Regularity
1. Check that debt has been properly entered into General Ledger
according to correct classification under Chart of Accounts.
2. Examine reporting and check against data in General Ledger and
Liabilities Ledger.
3. Review the classification of public debt instruments to ensure it is in
agreement with the legislation, regulations and practices.
4. Verify that accounting principles applied are in conformity with
legislation, regulations and applicable accounting standards.
Payment of Penalties
Date(s) Conducted:
Done WP
Audit Procedure
By: Ref.
Existence and Occurrence
Regularity
1. Is the proposed method the best one for the intended objective?
2. Are key assumptions of project design valid?
3. Is the question of sustainability addressed in the PC-1?
Progress Assessment
Date(s) Conducted:
Done
Audit Procedure WP Ref.
By:
Existence
Completeness
1. Check for a sample selected out of the Fixed Assets Register that the
assets physically exist and that they comply with the information in the
Register regarding location, asset identification number, description,
classification, and other relevant information.{Rule 159 of GFR Vol-1}
2. Check from physical inspection of a sample of assets on site that they
are entered into the Register and that the information about them is
accurate. {Rule 160 of GFR Vol-1}
3. Check for a sample of expenditures that they have been recorded
correctly in the Fixed Assets Register and that they are on site,
according to location and that they are operational and being used.
{Rule 148 of GFR Vol-1}
4. For any items still in storage, or non-commissioned, determine their
reasons for non-functional state. {Rule 162 of GFR Vol-1}
5. For any assets not delivered, determine why payment was made
before delivery. {Rule 11 & 12 of GFR Vol-1}
Measurement
Purchases
Check for a sample of additions that:
1. Budget was approved for the particular purchase. {Rule 11 & 12 of GFR
Vol-1}
2. Purchase Indent is approved by the competent authority.
3. Tendering process was done in accordance with {Rule 20 to 27 of PPR
2004}.
4. Purchase Order generated in favor of selected/approved supplier.
5. For the sample of purchased items during period audited, check that
the cost listed in the Fixed Assets Register is the same as the purchase
price (including cost of installation & commissioning) and check against
supporting documentation.
Done
Audit Procedure WP Ref.
By:
Transfer in
1. For items transferred in, check whether any transfer payments were
made and if so whether for an appropriate amount.
2. Ensue that any donation/gift of fixed asset received, met the
requirements of the {Accounting Policies and Procedures Manual-
APPM [13.4.3 - Donations/gifts of fixed assets]}.
Subsequent Capitalization
1. Review any expenditure on improvements to assets and check that
these have been identified as capital expenditures.
Disposal
Check for a sample of fixed assets disposal that:
1. Whether proper authority was obtained to dispose of the asset.
2. That an appropriate price was obtained (either by a competitive bid
process or by benchmarking the value of the asset before determining
the price).
3. Where possible, compare prices obtained for similar assets and
investigate any assets apparently sold below value.
4. For any revenue, check that this was properly recorded in the General
Ledger, or other account.
{Para 166-168 of GFR Vol-1}
Transfer out
1. For items transferred out, check whether any transfer receipts were
obtained and if so whether for an appropriate amount.
2. Check the accumulated depreciation of the assets transferred out has
been excluded from the accounts.
3. Check that any income earned on the transfer out of fixed assets was
correctly recorded.
4. Confirm that assets were received by the organizations to which they
were transferred.
{Para 150 & 166-168 of GFR Vol-1}
Land Acquisition
1. Check that acquisition of land was made after proper evaluation and
award under the rules.
2. Land acquired was in public interest within the ROW of road / building.
3. Land award announced within one year in ordinary case and within six
month in emergency case (U/S 17.4(6) and responsibility fixed for extra
cost caused due to delay regarding revised land rate or interest beyond
six month as per Clause 7 of Land Acquisition Rules 1982.
4. Check that name of land owner, actual acquired area, rates applied for
land or other item in land award.
5. Check that mutation of land acquired in the name of Govt. done.
6. Check that proper account of PLA (Assignment Account) is available for
advance obtained in each case for land acquisition. Reconciliation
made. Vouched account issue to concern besides refund of unspent
Done
Audit Procedure WP Ref.
By:
balance.
7. Check that PLA pass book and voucher slips for each account was
available.
{Land Acquisition Act 1894 Chapter-Section-4, 5, 6, 10, 11, 16, 17 &
23}
Ownership of Fixed Assets
Date(s) Conducted:
WP
Audit Procedure Done By:
Ref.
Existence and Occurrence
1. Select a sample of transactions and check that the sanction
necessary of grant in-aid exists. {Para 206 of GFR Vol-1}
2. Check that every order sanctioning a grant specifies clearly the
object for which it is given and the conditions, if any, attached to the
grant. {Para 207(1) of GFR Vol-1}
3. In the case of non-recurring grants or specified objects, the order
WP
Audit Procedure Done By:
Ref.
should also specify the time limit within which the grant or each
instalment of it is to be spent. {Para 207(1) of GFR Vol-1}
4. Check payments of grant / contribution entered into ledger for
correct year.
5. Confirm that the payment was made to correct payee by comparing
information on cheque register with details on grant / contribution
information.
6. At least for large transactions and transactions close to year end,
may decide to contact recipient of grant / contribution to obtain
confirmation that the monies were spent on what was agreed to (if
these are distant from site where conducting audit, may seek
confirmation in writing from DDO or independent party).
Completeness
1. Ensure that there has been proper authority to enter into the
process of supplying the grants / contributions and that size of the
grants / contributions is within the authority limit of the authorizing
WP
Audit Procedure Done By:
Ref.
officer.
2. Check that the expenditure is consistent with the nature of the
appropriation to which it was charged - check for each in the sample,
whether the particular grant / contribution is a correct expenditure
against the budget.
Date(s) Conducted:
Done WP
Audit procedure
by Ref.
Done WP
Audit procedure
by Ref.
Preparation of Budget and its approval
Cash Book
Cheque Books
Sub-Cash Book
1. Check all bills drawn on DDO like pay and allowances, TA/DA,
contingencies, GPF Advances / Final payment, Motor Car/Cycle
Advance, Cycle Advance etc. entered on receipt side of cash book.
2. Against the bills drawn payment to official concerned properly
entered on payment side.
3. Unpaid amount deposited into treasury / short drawn.
4. Entries in cash book was correct according to monthly payment
schedule issued by DDO.
5. Cash Book closed monthly and signed by DDO.
{Article 80-85 of Account Code Volume-III}
Chapter 7
7.1 Introduction
There are two audit phases covered in this section namely, Evaluation of Audit Findings/Results and
Reporting of audit conclusions.
By the end of the fieldwork stage, the auditors will have completed their audit programmes and
documented the results of their work. Part of this work would have involved the identification of
monetary errors, compliance with authority violations, internal control deviations, etc. These errors
and deviations need to be dealt with during the evaluation phase.
Error evaluation is done in stages. First, the auditor reaches a conclusion on the results of each test.
Next, the auditor reaches a conclusion on each component. Finally, the auditor reaches a conclusion
on the Financial Statements as a whole.
The optimum mix of tests of internal controls, analytical procedures and substantive tests of detail
for one specific Financial Audit or Compliance with Authority objective for one component may be
totally different from another objective or component. Appendix D of FAM provides a non-technical
discussion on the theory behind the overall error evaluation process – how the auditor can combine
different sources of assurance to reach an overall conclusion on the Financial Statements.
Reporting of Audit Conclusion
Audit reports should be easy for entity management to read (brief and clear);
The Audit reports will be read by Parliamentarians, the media and the public and
should be written with a minimal technical terminology and not assuming a prior
understanding of the detailed business of the entity;
The contents of the audit report should focus only on material and significant matters;
Any conclusions and recommendations should be useful; and
All audit observations should be fully supported by reliable and sufficient evidence.
It is critical that the audit team works diligently through forms and schedules in the Evaluation and
Reporting section of the Audit Working Papers Kit since it provides the documentation that supports
the Auditor-General’s opinion on the entity’s Financial Statements and compliance with government
rules and regulations.
The audit team leader will ensure that each form is signed off, reviewed and approved by an
appropriate official before it is considered complete.
It needs to be highlighted that the audit strategy and methodology recommended under FAM
provide for continued quality assurance through all the phases of audit. While reviewing the
reporting phase, the functionaries entrusted with the quality assurance of audit should ensure that
the various steps recommended in these Guidelines and respective forms given in the Audit Working
Papers Kit have been followed in all respects.
The following tools are provided to ensure the quality of the auditors’ opinion on the Financial
Statements and their audit report:
These documents and the diligent performance of quality assurance procedures given in section 15
of FAM help ensure that the DAGP has the audit evidence that it requires, and that the Auditor-
General is signing the most appropriate opinion and approving the Compliance with Authority report
based on valid audit findings.
A formal process, governing how audit observations are developed, cleared and reported in the
most appropriate reporting style, ensures quality. This process helps to ensure that the contents of
the report are correct, and that the findings, conclusions and recommendations contained in the
report are easily understood and appreciated by the readers of the reports.
Detailed guidance is provided in the following sections of the Financial Audit Manual:
The following paragraph explains the various steps of the Reporting Cycle.
i) The reporting cycle begins by issuing Observations Statements (OS) during field
work.
ii) Audit and Inspection Report (AIR) is issued to the PAO based on initial management
response on the OS.
iii) Management response is obtained on the AIR.
iv) Draft Audit Report (DAR) is prepared by incorporating management response on the
AIRs.
v) Internal Quality Control Checks are performed by supervisors to ensure that the
information given in the DAR is complete, relevant and supported with audit
evidence.
vi) The DAR is issued to the PAOs for Departmental Accounts Committee (DAC)
meeting.
vii) The paras finalized for Audit Report are retained in the AR section, while those which
cannot find a place in the Audit Report are sent back to the concerned IR sections.
These Paras are compiled and issued as MFDAC by the IR sections for further
pursuance. The MFDAC is compiled and issued on a yearly basis to respective PAOs.
i) Paras and their replies are discussed with the respective PAO.
ii) Minutes are prepared and signed.
iii) DAR is updated based on the DAC minutes.
iv) Further Audit comments are incorporated in the end as a final recommendation of the
Audit Para.
v) Final Audit Report is prepared PAO wise and is sent to the AGP office for Quality
Assurance Review.
Under Article 171 of the Constitution, reports of the Auditor General of Pakistan shall be submitted
to the President, who shall cause them to be laid before the National Assembly.
i) Pre-PAC meeting is held with the Auditor- General of Pakistan or the Additional
Auditor-General .The audit paras are discussed thoroughly before being presented at
the Public Accounts Committee (PAC) meeting.
ii) During the Pre-PAC meetings, the audit observations are categorised according to
their significance. Cases, where remedial measures have been taken by the audited
departments, are also marked for the consideration of the PAC.
i) The Director General Audit –Federal Government, on behalf of the AGP supports the
PAC for appropriate action against the paras included in the Audit Report.
ii) The PAC accordingly disposes of the audit paras by giving necessary directives to the
executives/PAOs.
Titles of various forms specified in the Audit Working Papers Kit are listed below:
Internal Control Weaknesses – Impact Analysis *
Analytical Procedure Thresholds
Evaluation of Analytical Procedures *
Evaluation of Internal Control Deviations *
Substantive Tests Evaluation – Projectable Errors from Sample
Substantive Tests Evaluation – Non-Projectable Errors
Substantive Tests Evaluation – Summary
Achieved Level of Assurance Form
Error in Each Component
Overall Error in Financial Statements
Compliance-With-Authority Violations *
Checklist of Management Representation Letter
Sample Management Representation Letter
Audit Completion Checklist *
Memorandum Supporting Signature
Auditor’s Opinion
Follow-up Continuity Schedule *
Quality Assurance Checklist *
Note: These forms recommended under FAM and Audit Working Papers Kit essentially meet the
requirements of Certification Audit. However, some of these forms, marked with asterisks (*),
can also be used for Compliance with Authority Audit.
The following paragraphs provide general guidance for using the above mentioned forms.
Instructions for filling in these forms are contained in the Audit Working Papers Kit which the
auditors are required to follow.
This form is used to calculate the thresholds that the auditor should apply to each analytical review
procedure used in audit. Complete instructions are provided on the form.
If the difference exceeds the threshold value, the auditor will obtain an explanation from entity
management which will be recorded on the form together with the auditor’s comments. The auditor
will decide whether the explanation of the difference is acceptable. If the difference warrants a re-
assessment of audit risk, reduced reliance on analytical procedures or an increase in substantive
tests of details, the auditor’s decision is recorded on this form.
The MLE and UEL are then compared with the previously calculated materiality amount to
determine whether the results of the audit are satisfactory or not, to provide the auditor with
the basis for his/her conclusion.
While the assessments should be made for each Financial Audit objective and Compliance with
Authority Audit objective for each component, the form permits the auditor to list more than one
such specific objectives and/or component on each form. This is because the auditor will likely have
planned to use the same sources of assurance assessments for several different objectives and
components, and will, therefore, have listed more than one component, specific Financial Audit
objective and related Compliance with Authority Audit objective on his/her Source of Assurance
form.
This form is designed to assist the auditor to determine whether he/she has achieved the desired
level of overall audit assurance (i.e. reduced audit risk to the desired level). Detailed instructions are
provided on the reverse of the form.
Before evaluating error in the Financial Statements as a whole, the auditor uses this form to evaluate
the error in each component. The auditor, following the directions on the form, completes one form
for each component being audited.
The information on this form is consolidated in the Overall Error in Financial Statements form.
This form is designed to summarise errors in the Financial Statements – first the errors in
receipts/revenues, expenditures and net income, and then the errors in assets, liabilities, equity and
opening residual equity. The last table of this form then shows the overall most likely errors in
assets, liabilities, receipts/revenues, expenditures, equity and opening residual equity, culminating
with a Summary of Most Likely Errors.
This form is used to capture information on each violation of compliance requirement. For example,
an entity may have reported under-spending a particular grant, whereas the auditor has concluded
that expenditures have not all been properly charged to that grant. This type of error, and other
compliance violations, would be evaluated using this form.
During the course of the audit, entity management will have provided the auditors with financial and
many other pieces of information, both verbally and in writing, which the auditors will have relied on
during the audit. The audit team should draft a Management Representation Letter that the entity
management will sign to acknowledge in writing their responsibility for the completeness and
accuracy of the Financial Statements and for all other representations made to the auditors.
This checklist will help the audit team ascertain whether all necessary matters are properly referred
to in the Management Representation Letter.
This form provides the audit team with a sample letter to use as a starting point in obtaining a
Management Representation Letter for their particular audit. This letter is a very important
component of the audit as it clearly establishes that management is responsible for the Financial
Statements presented to the auditors and for all additional information provided by them. It will
help focus management’s attention on the importance of the audit, and their participation in it.
Before the Auditor-General or other delegated DAGP official signs the final audit report for
presentation to the Parliament, they must be satisfied that the audit team has diligently carried out
a proper audit. This checklist will be completed and signed by the Director General of the particular
audit to confirm that the audit has been conducted in accordance with the DAGP audit standards.
The Audit Completion Checklist provides the official signing the audit with assurance about the audit
procedure but not about the Financial Statements or audit findings. This Memorandum provides the
signing official with this additional information and will provide the basis for a briefing on the
conduct and conclusions of the audit.
Based on the work of the audit team, the Auditor-General prepares audit reports, which also contain
the Auditor’s Opinion. The audit team will recommend the opinion which it believes is appropriate in
the circumstances.
Chapter 12 of FAM provides extensive discussion on the Audit Report. All auditors should be familiar
with the concepts presented in this chapter since all the audit work they perform culminates in the
Audit Report.
The Audit Working Papers provide examples of the different standard audit opinions: Unqualified
Audit Opinion; Qualified Audit Opinion – Scope Limitation; Qualified Audit Opinion – Departure from
Government’s Accounting Policies; Qualified Audit Opinion – Uncertainty; Qualified Audit Opinion –
Inappropriate Accounting Policies; Adverse Audit Opinion; Disclaimer of an Opinion.
Audit teams should be prepared to recommend Qualified, Adverse or Disclaimer of opinion where
circumstances warrant. The purpose of these opinions is to highlight situations where government
policies are not being followed so that corrective action can be taken and improvements can be
made. It is likely that many audits will result in Qualified, Adverse or Disclaimer of opinion during the
first years of applying the new audit paradigm, as it will take the audit entities some time to bring
their accounting practices fully up to the new standards.
Follow up is an integral part of the audit function. The auditor’s objective is not fulfilled unless any
errors or deficiencies identified during the audit have been correctly addressed. Both the DAGP and
the Public Accounts Committee (PAC) should check that the entity officials take action to correct all
errors found, and deal with all the recommendations made.
The entity officials themselves are responsible for ensuring that their Financial Statements and that
their internal control structures are operating as efficiently and effectively as possible. They should
be encouraged to view the auditor as an ally in this endeavour and should actively work with the
auditor to address any concerns.
To achieve these objectives, there should be a formal follow up of every Regularity Audit. All
observations, conclusions and recommendations should be pursued and reported until they are
satisfactorily dealt with, or until circumstances have rendered them no longer relevant.
The follow-up phase involves checking the relevant record pertaining to observations raised at a
later date to determine if entity officials have:
Audits frequently identify situations that require follow-up in the following years. For example,
control failures in one year should result in recommendations for future improvements, so future
audits should see if the recommendations have been followed.
This form summarises issues that previous audits have identified and tracks how they were handled
in the current year’s audit and whether any additional follow up in future years is required.
Note: Please refer to Chapter 14 “Audit Follow up” of FAM for details on the subject.
Just as the auditors are concerned with the quality of the audit entities’ Financial Statements, they
must check the highest quality of their own work, if they are to earn and keep their professional
credibility. Consequently, quality assurance procedures are implemented through comprehensive
working papers and sign-offs throughout the audit. At the conclusion of audit, an appropriate
official should review the audit files to check whether the audit team has fulfilled all the
requirements of a quality audit.
It is emphasised that the primary purpose of this post-audit review is to encourage continuous
improvement in the quality of the DAGP’s work. The reviews are not intended to praise or criticize
the work of the audit team or individual auditors. In this spirit, those being reviewed should be
comfortable in offering their own suggestions as to how the audit could have been performed more
effectively or efficiently.
As discussed in the Planning Chapter at 5.31, in case of centrally led audit, there will be a division of
responsibilities between the central team and field audit teams of the same directorate or other
directorates.
Chapter 8
8.1 Introduction
With the up gradation of the sectoral Guidelines it was felt that key tasks, revised roles and
responsibilities need to be assigned for effective and structured implementation of these Guidelines.
This section of the Guidelines specifies key Tasks and Responsibilities of various functionaries in a
Field Audit Office (FAO) involved in performing audit related tasks during the course of the audit
cycle. Main areas for which Key Tasks and Responsibilities have been defined are given below;
Permanent File
Audit Planning Phase
Audit Execution Phase
Audit Evaluation and Reporting Phase
Quality Assurance
The purpose of the key Responsibility Matrices given at the end of this section is to provide the
functionaries with an overview of their roles and responsibilities in the Audit Cycle. Moreover this
will also serve as a monitoring tool and will facilitate in measuring the performance of the personnel
involved in various phases of audit.
These Key Tasks and Responsibilities have been developed for the four standard tiers of
functionaries in an FAO. They are Audit Officer/Assistant Director, Deputy Director, Director and
Director General. It is recommended that functionaries below this level may not be involved in the
auditing processes. However, in cases where the DG of an FAO considers appropriate, he may assign
the responsibilities of an Audit Officer to an Assistant Audit Officer.
In all cases where key tasks have been assigned to a functionary and that functionary is temporarily
or structurally not available in the office, the head of the office will be required to assign the key
tasks and responsibilities appropriately.
The Director General will be required to assign specific responsibilities to all the officers in the FAOs
for each audit and the performance of officers can then be monitored accordingly.
For High Profile Audits and studies of public significance, the DG may like to raise the level of the
audit team by substituting Audit Officers/Assistant Director with Deputy Directors and Directors. The
roles and responsibilities which are specified in this section pertain only to the Audit Cycle. For other
functions like clerical record keeping, administration, budgeting etc, the existing job descriptions
available in the FAO should be used for defining the key tasks in each area.
RESPONSIBILITIES
Guideline
TASKS AO/Assistant Deputy Director
Reference Director
Director Director General
Development of a brief P R
description of the
accounting system used by
the auditee.
Updating determination of P R
components.
RESPONSIBILITIES
Guideline
TASKS AO/Assistant Deputy Director
Reference Director
Director Director General
RESPONSIBILITIES
Guideline
TASKS AO/Assistant Deputy Director
Reference Director
Director Director General
Summary.
RESPONSIBILITIES
Guideline
TASKS AO/Assistant Deputy Director
Reference Director
Director Director General
RESPONSIBILITIES
Guideline
TASKS AO/Assistant Deputy Director
Reference Director
Director Director General
Planning
5.3 Review that Planning has been R S
carried out as per the recommended
planning process.
FAM Assigning Appropriate staff, P R
15.3.6 required strength and skill set of the
audit team.
FAM Preparation, revision and approval P R A
15.3.7 of the Audit Budget.
5.30 Ensuring that audit programs are in P R
place as required in Audit Policy
Checklist.
Execution
5.8 Ensuring revision of the planning P R A
decisions, if required.
Supervision of all phases of P R-S
execution as per the tasks assigned
in “key tasks related to execution
phase” list.
To ensure review of audit working P R S
paper files.
6.16 To ensure executing audit steps as P R S
per the Audit Programs.
Ensuring reporting and monitoring P R-S
of audit activities with reference to
“execution task list.”
Evaluation & Reporting
7.3 To ensure detailed review and P R-S A
approval of monetary errors,
compliance with authority
Violations and internal control
deviations found.
7.15,7.16, Ensuring tools for the auditor’s P S R
7.18 opinions and statements are used.
7.17 Ensuring Documentation of Audit P R-S A
Completion Checklist.
7.21 Reviewing the Quality Assurance P R A
Checklist. *
* The Comprehensive Quality Assurance Checklist present in the Audit Working Papers Kit covers all
the phases of audit. This checklist is the master guide for assuring the quality of audit processes
throughout the audit cycle.
APPENDIX-A
PF-I
Status of the Entity
PF-II
Background Information
PF-III
List of Auditable Locations
PF-IV
List of Bank Accounts
PF-V
List of Authorised Signatories
PF-VI
External Factors
PF-VII
Accounting Records and Accounting System
PF-VIII
Key Contacts
PF-IX
Significant Audit Areas
PF-X
Significant Accounting Policies
Organization Chart
Accounting Policies
Chart Of Accounts
Form PF- I
Principal Address:
The main Office of the National Electric Power Regulatory Authority (NEPRA) is situated at
2nd Floor, OPF Building, G-5/1, Islamabad
Inter-Governmental Relationship:
National Electric Power Regulatory Authority (NEPRA) is under the administrative control of Cabinet
Division.
AUDITOR-GENERAL OF PAKISTAN
PERMANENT FILE
Form PF- II
Size of Entity
Total Assets Rs. 1,240.384 million
Total Liabilities Rs. 158.554 million
Total Revenue Rs. 344.795 million
Total Grant and Surplus Rs. 1,080.829 million
Total Expenditure Rs. 177.406 million
Business Processes
(1) The Authority is exclusively responsible for regulating the provision of electric power services.
(2) In particular and without prejudice to the generality of the foregoing power, only the
Authority, subject to the provisions shall:
(a) Grant licences for generation, transmission and distribution of electric power;
(c) Prescribe and enforce performance standards for generation, transmission and
distribution companies;
(e) Prescribe fees including fees for grant of licences and renewal thereof;
(f) Prescribe fines for contravention of the provisions of NEPRA Act 1997; and
(g) Perform any other function which is incidental or consequential to any of the aforesaid
functions.
(3) Notwithstanding the provisions and without prejudice to the generality of the power
conferred to the, Authority shall-
(a) Determine tariff, rates, charges and other terms and conditions for the supply of electric
power services by generation, transmission and distribution companies and recommend
to the Federal Government for notification;
(c) Encourage uniform industry standards and code of conduct for generation, transmission
and distribution companies;
(f) Perform any other function which is incidental or consequential to any of the aforesaid
functions.
(4) Notwithstanding anything contained in NEPRA Act 1997. The Government of a Province may
construct power houses and grid% stations and lay in NEPRA Act 1997 transmission lines for
use within the Province and determine the tariff for distribution of electricity within the
Province.
(5) Before approving the tariff for the supply of electric power by generation companies using
hydro-electric plants, the Authority shall consider the recommendations of the Government of
the Province in which such generation facility is located.
(6) In performing its functions under this Act, the Authority shall, as far as practicable, protect the
interests of consumers and companies providing electric power services in accordance with
guidelines, not inconsistent with the provisions of this Act, laid down by the Federal
Government.
Major Beneficiaries
Public.
Generation, transmission and distribution company.
Reporting Authority
Federal Government
AUDITOR-GENERAL OF PAKISTAN
PERMANENT FILE
Form PF- III
PERMANENT FILE
Form PF - IV
Sr. No.
The signatories of the cheque were the following during the audit period:
External Factors:
Government Policies.
General Public.
Law and Order.
Industrial Sectors.
.
AUDITOR-GENERAL OF PAKISTAN
PERMANENT FILE
Form PF- VII
General Ledger
Vouchers
Monthly payroll
Investment Ledger.
Employee GP Fund record
Employee pension record
Employee advances record
Personnel file of employees
AUDITOR-GENERAL OF PAKISTAN
PERMANENT FILE
Form PF- VIII
1. Chairman 051-9220902
3.
Member Tariff 051-9206887
4.
Member (Std &Priv) 051-9207300
5.
Member (S) 051-9259261
6.
Registrar 051-9206500
7.
Deputy Director Finance 051-9206798
AUDITOR-GENERAL OF PAKISTAN
PERMANENT FILE
Form PF- IX
N
Physical Assets
N
Repair and Maintenance
Y
Employee related expenses/ payments
Y
Operating expenses/payments
Y
Revenue
Y
Investments
AUDITOR-GENERAL OF PAKISTAN
AUDIT PLANNING-PERMANENT FILE
Form PF- X
Recognition of Expenditure
Commitment Accounting
o A valid purchase order is raised and where applicable a purchase contract has been
entered with the supplier. The amount involved should be clearly mentioned in the
purchase order/ contract.
o The officer in accordance with delegation of financial powers has authorized the
commitment.
o The amount involved is above Rs.10,000 or 10% of total budget head, whichever is
higher.
o Exclude employee related expenses.