Audit Program

AUDIT PROGRAM
Client: Grace Corporation

Year Ended: December 31, 2018
Audit Manager:
Audit Senior:
Audit Clerk:
Date Started:
Partner Review:
Signature:
Date:
INITIAL
W/P
SECTION COMMENT AND
REF.
DATE
General Ledger Review
Verify the balances in the financial statements and
are correct by calculating total assets, liabilities,
and equity.
Verify that each one of the balances in the
financial statement coincide with the balances in
the general ledger.
Determine that all reports submitted since the last
examinations are accurate.
Approve on opening the last year's accounts and
working papers to check if the balances in the
general ledger arc correct.
Justify that the client's account print-out coincides
with the trial balance.
Obtain client's management accounts, if any.
Study the areas where problem arises from the
management accounts.
Check if there are large and unusual transactions
in the year-end journal entries.
Cash
Conduct a cash count of undeposited collections,
petty cash, and other funds.
Confirm bank balance by direct correspondence
with all banks in which the client has had deposits
and loans during the year.
Obtain bank reconciliation.
Obtain bank confirmation letter from office.
Obtain cutoff bank statement showing the client's
transactions with the bank at least one week after
the reporting date.
Obtain a list of interbank transfers of funds a few
days before and after the reporting date.
Determine any restrictions on availability of cash.
Determine propriety of financial statement
presentation and adequacy of disclosures.
Receivables
Obtain a list of aged accounts receivable balances
from the subsidiary ledger.
Test accuracy of balances appearing in the
subsidiary ledger.
Confirm accuracy of individual balances by
sending confirmation letter to customers.
Review correspondence with customers for
possible adjustments.
Test of propriety of cutoff.
Perform analytical procedures.
Review individual balances and age of accounts
with appropriate officer.
Obtain analyses of significant other receivables.
Obtain receivable representation letter from client.
Inventories
Account for all inventory tags and count sheets
used in recording the physical inventory counts.
Test the clerical accuracy of inventory listings.
Obtain confirmation of inventories at locations
outside the entity.
Review perpetual inventory records, production
records, and purchasing records indications of
current activities.
Analytical review the relationship of inventory
balances to recent purchasing, production, and
sales activities, and to anticipated sales volume.
Examine paid vendors' invoices, consignment
agreements, and contracts.
Obtain confirmation of inventories pledged under
loan agreements.
Investments
Obtain an analysis of the investment account.
Trace to applicable general ledger balances.
Vouch changes during the year by reference to
board minutes and brokers' advices.
Verify completeness of dividend and interest
revenues, and where necessary, by reference to
outside published sources.
Review minutes, agreements, and confirmation
replies for the evidence of liens, pledges, or other
security interests in the entity's investments and of
commitments to acquire or dispose of investments.
Inspect market quotations, financial statements of
investee(s), and other evidence to determine the
current value of investments.
Verify computations of gain and losses from
disposals of investments.
Property, Plant and Equipment
Trace opening balances to last year's working
papers.
Vouch significant transactions to ascertain
Authorization, Propriety of accounting, and
Accounting principles applied.
Vouch documents evidencing ownership.
Prepare schedules of the property, plant, and
equipment account.
Trace individual balances to the detailed records
or property cards.
Determine authorization by examining invoices,
capital expenditure, leases, and other evidence
supporting acquisition or additions to property,
plant, and equipment during the period.
Examine support for significant changes to repairs,
maintenance, and other expenses accounts to
determine if they should be capitalized to
property, plant, and equipment.
Test computations of depreciation, and
amortization to determine the appropriateness of
the methods and estimated lives used.
Ascertain that fully depreciated assets still in use.
Prepayments
Prepare detailed analysis of the accounts.
Verify the accuracy of the analysis by performing
mathematical computations.
Determine the nature of the accounts included in
the analysis.
Determine the reasonableness of the amounts.
Examine supporting documentations.
Intangible Assets
Obtain an analysis of intangible assets.
Verify the accuracy of the analysis by performing
mathematical computations.
Vouch current year transactions to supporting
documentation.
Determine if the company's amortization policies
are in accordance with PAS 38.
Determine if there is proper allocation of the
amortization recorded for the period.
Determine if there is impairment of value of
intangible assets.
Accounts Payable
Obtain a list of accounts payable from the
subsidiary ledger.
Check if the list reconciles with the general ledger
control account.
Trace individual balances to the subsidiary ledger.
Confirm accuracy of individual balances
appearing in the subsidiary ledger by requesting
statements of accounts from supplier.
Reconcile suppliers' statements of accounts with
client records and investigate any discrepancy.
Review correspondence with suppliers for possible
adjustments.
Test propriety of cutoff.
Examine purchases recorded and suppliers'
deliveries made a week before and after the end of
the reporting period and ascertain whether the
purchases were recorded in the proper period.
Investigate large amounts of purchases returned
shortly after the end of the reporting period.
Ascertain whether some payables are secured with
asset pledges.
Compare payments after the reporting date with
year-end schedule of accounts payable.
Review propriety of financial statement
presentation and adequacy of disclosures.
Obtain accounts payable representation letter.
Noncurrent Liabilities
Foot and cross-foot the schedule.
Determine client's compliance with loan
agreements.
Recompute the accuracy of any discount or
premium amortization.
Reconcile interest payments with recorded
liabilities.

Audit Program

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AUDIT PROGRAM

Client: Grace Corporation

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