ASSURANCE IN FINANCIAL AUDITING_part10 potx

A Handbook 241Appendix 5D INDIVIDUAL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL Name of Reviewer Reviewing object name Na

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A Handbook 235

INTOS

AI Ref

ISA Ref

Y E S

N O

(Describe the brief explanation of findings and link it to next template which

showed the next Appendix )

WP Ref

Where the

stock take

in taken at

a date

other than

the balance

sheet date

was

adequate

considerati

on given to

stock

transaction

s between

the stock

take date

and the

balance

sheet date

If

perpetual

stock

records are

maintained

are

differences

disclosed

by the

client’s

physical

stock

properly

reflected in

the

account

3

Were cut off

tests

performed and

appropriately

documented?

Par 3.5 ISA

500 par 15

This is trial version www.adultpdf.com

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A Handbook 236

INTOS

AI Ref

ISA Ref

Y E S

N O

WP Ref

e Debtors /

Accounts

Receivable

1

Were tests

performed to

confirm the

existence of

debtors

Par 3.5 ISA

500 par 15

2

Were cut off

tests

performed and

appropriately

documented as

to credit notes,

cash receipts

and returns?

Par 3.5 ISA

500 par 15

3

Was the

reasonableness

of the

provision for

doubtful

accounts and

write-offs

adequately and

appropriately

covered in the

working

papers?

Par 3.5 ISA

500 par 15

4

Are other

accounts

receivable

adequately

verified?

Par 3.5 ISA

500 par 15

f Bank and

Cash

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A Handbook 237

INTOS

AI Ref

ISA Ref

Y E S

N O

WP Ref

1

Were bank

request

confirmations

obtained in

respect of all

banking

accounts?

Par 3.5 ISA

500 par 15

2

Were the bank

certificates

agreed to the

bank

reconciliation

statements/

Par 3.5 ISA

500 par 15

g

Creditors /

Accounts

Payable

1

Do the audit

working

papers indicate

that source

documents

were

examined?

Par 3.5 ISA

500 par 15

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A Handbook 238

INTOS

AI Ref

ISA Ref

Y E S

N O

WP Ref

3

Do the audit

working

papers indicate

that adequate

confirmation

coverage was

made and

documented,

or examination

of suppliers’

statements

when

considered

appropriate,

including zero

balances and/

or

unreasonable

or

unexpectedly

low balances?

Par 3.5 ISA

500 par 15

4

Were cut off

tests

performed and

appropriately

documented as

to purchases

and

disbursements,

including a

search for

unrecorded

liabilities?

Par 3.5 ISA

500 par 15

5

Were the tests

of balances of

the accrued

liabilities

adequate?

Par 3.5 ISA

500 par 15

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A Handbook 239

INTOS

AI Ref

ISA Ref

Y E S

N O

WP Ref

6

Are other

current

liabilities

adequately

verified?

Par 3.5 ISA

500 par 15

h

VAT /

PAYE

E

1

Was VAT

adequately

audited?

Par 3.5 ISA

500 par 15 2

Was PAYE

adequately

audited?

Par 3.5 ISA

500 par 15

i Cash flow

inform

ation

1

Have the

appropriate

cash inflows

and cash

outflows been

properly

recorded in the

cash flow

Statements?

Par 3.5

2

Is there

evidence on

the file that the

cash flow

statement was

audited?

Par 3.5 ISA

500 par 15

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A Handbook 240

INTOS

AI Ref

ISA Ref

Y E S

N O

WP Ref

3

Was other

inform

ation,

include

d in the

financi

al

statem

ents,

verifie

d to

determ

ine if

any

inconsi

stencie

s exist?

Par 3.5

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A Handbook 241

Appendix 5D

INDIVIDUAL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL

FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL

Name of

Reviewer

Reviewing object name

Name of audit

manager/ Director

Conducting Financial audit phase

(circle please)

Planning/ Conducting/ Reporting

Observation:

Insert the observation here

Cause

Effects:

Write down impact of observation

Feedback from the Audit manager/ Audit director

Insert the feedback here

Recommendation

Insert recommendation

INDIVIDUAL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL

Write the reason of observation including the sub element reference

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A Handbook 242

FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL

Name of

Reviewer

Financial year 2007 QAQ reference C1

Reviewing object name Agency of secondary education

Name of audit

manager/ Director

Conducting Financial audit phase

(circle please)

Planning/ Conducting/ Reporting

Observation:

INTOSAI Standards paragraph 3.1.3 (k), International Auditing standards 300 paragraph 2, 8

& 9 and International Standards of Supreme Audit Institution 1300 require working papers

to include a planning memorandum

Although the SAI methodology requires the preparation of planning memorandum, there was

no planning memorandum on file There was no indication that a plan was prepared before the execution of the audit

Cause

Effects:

Objectives of the audits may not be achieved due to lack of planning and this may result in wastage of resources

Feedback from the Audit manager/ Audit director

The observation is noted and we make all the necessary effort to prepare audit plans and

place them on file

Recommendation

The SAI should develop an operational plan that considers all resource requirements and

allocates sufficient resources to enable audit teams to conduct their audits efficiently and

effectively Adherence to the operational needs should be monitored by the supervisors

During the period under review the SAI was under pressure to meet the statutory deadline and teams were going out for audits without preparing audit plans and there was no proper supervision Last year the report was produced six weeks after the deadline

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A Handbook 243

Appendix 5E

QUALITY ASSURANCE REVIEW RECORDING FORM (QARRF)

1 TERMS OF REFERENCE

A Positive observation

Summary of the Key Positive Aspects from the Review

B Areas for improvement

QAQ

reference

Observation Causal

Factors Sub-element

Effects Recommendations Audit manager/

Audit director Comments

2 PLANNING

QAQ

reference

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3 EXECUTION PHASE

QAQ

reference

4 REPORTING PHASE

QAQ

reference

Signed by ……… Date ………

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Appendix 5F

SAMPLE: QUALITY ASSURANCE REVIEW RECORDING FORM

Appendix 5F

SAMPLE: QUALITY ASSURANCE REVIEW RECORDING FORM

1 TERMS OF REFERENCE

Copy of audit engagement letter was attached in audit file and it confirmed the auditor’s acceptance of the appointment, the objective and scope of the audit, the extent of the auditor’s responsibilities to the client and the form of reports

QAQ

reference

Observation Causal Factors

Sub-element

Audit director Comments A1 There are no

documents

demonstrating

compliance

with Code of

Ethics and

assessment of

the audit team

competency

Office does not have specific policy to assess the competency

of staff before assigning the audit engagement and system of evaluating the compliance of Code of Ethics

No any guidance was given in this regard

Internal Governance

The audit management did not know whether they had assigned competent team to the audit

The SAI needs to establish the policy of objective assessment of the competency of the available manpower

in the Directorate before assigning audit There should be proper documentation

of competency assessment and

competency SAI

should create a roster

of its manpower considering the expertise based on each sector and nature

of audit The assessment and monitoring policy needs to be formulated recognizing the requirement of the Code of Conduct

The policy of objective assessment of the competency of the available manpower within the respective Directorate will be formulated

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A Handbook 246

2 PLANNING

Materiality logically determined and well documented according to the IAS

QAQ

reference

Observation Causal Factors

Sub-element

Effects Recommendations Audit

manager/ Audit director Comments C.1 There was no

planning

memorandum

on file There

was no indication that

a plan was

prepared

before the

execution of

the audit

During the period under review the SAI was under pressure to meet the statutory deadline and teams were going out for audits without preparing audit plans and there was no proper supervision Last year the report was produced six weeks after the deadline

Internal governance

Objectives of the audits may not be achieved due

to lack of planning and this may result in wastage of resources

INTOSAI Standards paragraph 3.1.3 (k) and International Auditing standards 300 paragraph 2,

8 & 9 and International Standards of Supreme Audit Institution 1300 require working papers to include a planning memorandum It would be good for the SAI to come with a proper operational plan that will cater for all resource requirements and enable audit teams to conduct their audits efficiently and effectively

Adherence to the operational needs should

be monitored by the supervisors

The observation is noted and we make all the necessary effort to prepare audit plans and place them on file

H.5 The risk

assessment did

not evaluate

the significance of

the risks

identified and

the audit

procedures did

not clearly

respond to the

risks identified

There is no manual or technical guidance related

to risk assessment

Audit methodology and standard (Manual and Guidance)

The audit programs might lead to ineffective audit execution

SAI should prepare manual for the implementation of the risk assessment concept of guideline Process, toolkit and checklist for risk assessment need to be defined in the manual;

SAI has felt the necessity

of developing manual, format and toolkit for risk and internal control assessment Due to resources constraint SAI has yet to develop such document

procedures in

audit program

appear to be

inadequate to

attain the audit

The audit programs were not updated in case additional

or alternative audit procedures

The audit procedures may not attain the audit objectives

As audit progresses, changes due to additional audit procedures should be reflected in the audit program

The audit team leader will ensure that such changes are fully demonstrated

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objective were undertaken

during and upon completion of the audit

Audit Methodology (Tools) Human Resource (Training)

in the future

Signed by ……… Date ………

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Appendix 5G

Sample Template of draft report

FINANCIAL AUDIT REVIEW REPORT

TABLE OF CONTENTS

INTRODUCTION ……… 1

APPROACH AND METHODOLOGY ……… 1

OBSERVATIONS ……… 1

1 Terms of reference ……… 1

2 Planning ……….1

3 Execution ……… 1

4 Reporting ……… 1

5 General

Overall conclusion

Management response

INTRODUCTION

Please insert the background information

APPROACH AND METHODOLOGY

Please insert the main data gathering techniques

Limitations, if any, of the approach

OBSERVATIONS

1 Terms of reference

Positive observation

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Areas for improvement

Observation:

Effects:

Casual factors sub elements:

Recommendation:

2 Planning

Observation:

Effects:

Recommendation:

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3 Execution

Observation:

Effects:

Recommendation:

4 Reporting

Observation:

Effects:

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Recommendation:

5 General

Observation:

Effects:

Recommendation:

OVERALL CONCLUSION

MANAGEMENT RESPONSE

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