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B.1.2 Audit Programs for Different Cash Accounts 1.

Cash in VAULT NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH in VAULT ( Account Code 101 ) Account Description: This account is used to record the amount of cash collected by the Treasurer of the Philippines and the Treasurers of Local Government Units (LGUs) pending deposit. Audit Objectives: 1. To ascertain the existence or occurrence of the balance of cash in vault. 2. To determine the completeness and regularity of the account balance. 3. To determine whether the account is properly presented and adequate disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO )), Validity/Legality or Regularity ( VR ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

W P Re f

TO BE DON E BY

TIME FRAME DATE DATE START COMPLE ED TED

REMAR KS

1.1 Count all cash in vault simultaneously Physically control all cash and cash items until all funds have been counted to prevent transfers by the Treasurer of counted funds to uncounted funds. See to it that the Treasurer or the Custodian of the cash is present throughout the count. EO

ASSERTIONFS

AUDIT PROCEDURES

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TO BE DON E BY

TIME FRAME DATE DATE START COMPLE ED TED

REMAR KS

Obtain a signed receipt from the Treasurer on the return of the cash/funds to minimize the possibility, in the event of a shortage, of the Treasurer claiming that all cash was intact when presented to the auditor for counting. Verify whether all undeposited checks are payable to the order of the agency Prepare Cash Count Sheet. List the denominations of the cash and the cash items counted (examples in CA-1, CA-2 and CA-2a).

C EO RO

1.2

EO

2.1 Trace the account balance presented in the Trial Balance to the General Ledger (GL). Check that the balance matches with that of the balance appearing in the GL. 2.2 Verify the GL postings from the Cash Receipts Journal (CRJ) and General Journal (GJ). Check totals. Trace the entries in JEVs against the Report of Collections and Deposits (RCD) and source documents.

C EO C RO PD PD

2.3

3.1 Check whether the balance of the account is properly presented as Current Asset in the balance sheet and adequate disclosure is made in the financial statements. 4.1 Prepare Audit Observation Memorandum (AOM) on the noted discrepancy/ difference . 4.2 Organize working papers including indexing and cross-referencing.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

2. Cash-Collecting Officers NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH Collecting Officers ( Account Code 102 ) Account Description: The account represents amount of cash collections with Collecting Officers (CO) / Postmasters/ Telegraph Operators pending deposit. Audit Objectives: 1. To ascertain the existence or occurrence of the account Cash-Collecting Officers/Postmasters/Telegraph Operators. 2. To determine whether cash collections are completely and properly recorded as prescribed in the manual of NGAS and in accordance with existing laws, rules and regulations. 3. To determine whether the cash collections in foreign currency are properly valued in local currency at the current exchange rate as of balance sheet date.

4. To determine whether the account is properly presented and adequate disclosure is made in the financial statements. Assertions : Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS W P Re f TO BE DONE BY TIME FRAME DATE STAR TED DATE COMPL ETED REMAR KS

AUDIT PROCEDURES

1.1 Obtain the list / schedule of Collecting Officers with their account balances. 1.1 Count all cash on hand simultaneously in the presence of the CO. a. Examine the cash items, see to it that fake bills and demonetized coins are not included. b. Examine checks for erasures on amount and dates, authorized check signatories, endorsements and see to it that checks are made payable to the agency. The following should be excluded from cash items. Post dated checks Sale checks and money order Chits, IOUs, vales or other forms of promissory notes

C EO C EO VM

C EO VR RO VM

c. Prepare cash count sheet. List all cash counted by denominations including cash items. d. Segregate the cash items by group, such as: checks, money orders, etc. Proceed with the listing of the cash items using the space provided in the form. In the case of checks and money orders, indicate the serial number, date, drawer, drawee and amount.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES 1.3 Obtain the signature of the CO/ custodian acknowledging that funds were counted in his presence and were returned to him intact. 1.4 Compare cash counted with collections in the Report of Collections and Deposits / Cash Receipt Record on the date of count and reconcile with with Subsidiary Ledger to establish undeposited collections. Compute the shortage or overage, if any. In case of overage, have it receipted; in case of shortage, comply with the provisions of COA Memorandum 2002-053 dated August 26, 2002. 1.5 See to it that undeposited collections are deposited not later than the next banking day and that all checks and postal money orders counted are deposited and honored by the bank. Trace the undeposited collections to the subsequent bank-validated deposit slips and bank statements. Trace the account balance from Trial Balance to GL and compare with the total of the SL balances of CO. Verify discrepancy, if any. Verify GL balance from the CRJ / CJ. Check totals/ footings.

W P Re f

TO BE DONE BY

TIME FRAME DATE STAR TED DATE COMPL ETED REMAR KS

EO

C EO VR

C EO VR

1.6

C EO VR C EO

2.1

2.2

C EO C EO VM

2.3 Test check certain number of JEVs to establish proper cut-off.

ASSERTIONFS

AUDIT PROCEDURES review/analyze accounting entries trace to CRJ and/or CJ trace to RCD and review ORs and validated deposit slips supporting the RCD prepare working papers and note differences, if any. (ex. in CA-3) 2.4 Review the authority granted to the agency in the utilization of income /receipts and deposit with AGDB. 2.5 If the agency is authorized, check if it maintains two (2) sets of books (RA and NG) and uses separate set of Official Receipts (ORs) and Cash Receipts Record (CRR) for each set of book.

W P Re f

TO BE DONE BY

TIME FRAME DATE STAR TED DATE COMPL ETED REMAR KS

VR

VR

2.6 Check whether receipts which the agency is authorized to use are recorded in the CRJ, and that NG collections are recorded in the CJ. Likewise, check whether proper OR is issued for RA and NG collections and that collections and deposits are recorded in the proper CRR. (example in CA-4) Note discrepancy, if any. 3.1 From the cash count sheet prepared, check whether all foreign currencies are converted to local currency (peso) at the current exchange rate prescribed by BSP at balance sheet date. 3.2 Check whether the BSP/ forex rate used in converting foreign currency to peso is properly disclosed in the financial statements. 4.1 Check whether the account is properly presented as Current Asset in the balance sheet.

C EO VR

C EO VM

VM PD

VM PD

ASSERTIONFS

AUDIT PROCEDURES 4.2 Prepare and issue AOM for discrepancies noted. 4.3 Organize working papers including indexing and cross-referencing. PREPARED BY : Date

W P Re f

TO BE DONE BY

TIME FRAME DATE STAR TED DATE COMPL ETED REMAR KS

REVIEWED BY : Date

APPROVED BY : Date

3. Cash - Disbursing Officers NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH Disbursing Officers ( Account Code 103 )

Account Description: This account is used to record the amount of cash advances granted to designated Regular or Special Disbursing Officers/ Postmasters/ Telegraph Operators for payment of authorized official expenditures or redemption of postal money orders and telegraphic transfers subject for liquidation. Audit Objectives: 1. To ascertain the existence or occurrence of the account Cash - Disbursing Officers (DO). 2. To determine whether the grant of cash advances and the disbursements made are completely and properly recorded in accordance with existing laws, rules and regulations. 3. To determine whether the account is properly presented in the financial statements and adequate disclosure is made. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Presentation and Disclosure ( PD ). ASSERTIONFS TO BE DON E BY TIME FRAME DATE START ED DATE COMPLE TED

AUDIT PROCEDURES

W P Re f

REMAR KS

1.1 Obtain list/ schedule of regular and special Disbursing Officers and their account balances. 1.2 Count all cash on hand simultaneously: Physically control all cash and cash items held by the Disbursing Officers (DO) until all have been counted. This is to prevent transfers by the DO of counted funds to the uncounted funds. See to it that the DO is present throughout the count.

C EO

EO

Obtain the signature of the DO acknowledging that the cash were counted in his presence and the funds were returned intact. Marked the cash items such as Suppliers invoices and ORs which had been actually examined. EO

ASSERTIONFS

AUDIT PROCEDURES

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TO BE DON E BY

TIME FRAME DATE START ED DATE COMPLE TED

REMAR KS

1.3

Prepare Cash Count Sheet. List denominations of cash, and cash items counted. If cash items include suppliers invoices and paid payrolls, recommend that these be recognized as expense. Compare the total per count with the balance appearing in the Cashbook. Verify the difference, if any.

C EO

1.4

C EO C EO

1.5 Reconcile the cashbook / CDR balance with the SL to establish the accountability of the DO at the time of count. 1.6 For non-agency funds in the hands of the DO, obtain confirmation from those responsible for the administration of the said fund. 1.7 For non0agency funds in the hands of the DO, obtain confirmation from those responsible for the administration of the said fund. 2.1 Trace the balance to the GL/SL and ascertain if balances tally. 2.2 From the Schedule of Cash Disbursing Officers account in 1.1, compare balances with the GL/SL, TB and balance sheet (example in CA-5). 2.3 Verify details of the Schedule from Cash Disbursement Records. 2.4 Test samples of cash advances for authority/ approval and examine replenishment/ liquidation vouchers if in order.

C EO

EO RO

C EO C EO

C EO C EO VR

ASSERTIONFS

AUDIT PROCEDURES

W P Re f

TO BE DON E BY

TIME FRAME DATE START ED DATE COMPLE TED

REMAR KS

3.1

Check whether the account is properly presented as Current Asset in the balance sheet. Prepare and issue Audit Observation Memorandum for discrepancies noted (CA-5a). REVIEWED BY : Date

PD

3.2

PREPARED BY : Date

APPROVED BY : Date

4. Petty Cash Fund NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ PETTY CASH FUND ( Account Code 104 ) Account Description: This account is used to record in the books of the agency cash granted to designated Petty Cash Custodian for payment of authorized petty or miscellaneous authorized expenditures, which cannot be conveniently paid thru check. Audit Objectives: 1. To ascertain the existence or occurrence of Petty Cash Fund.

2.

To determine whether Petty Cash Funds are completely and properly recorded and utilized in accordance with existing laws, rules and regulations. 3. To determine whether the account is properly presented and adequate disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Presentation and Disclosure ( PD ). ASSERTIONFS TO BE DON E BY TIME FRAME DATE START ED DATE COMPLE TED REMAR KS

AUDIT PROCEDURES 1.1 Trace the balance presented in the Trial Balance to the GL. 1.2 Obtain the Cashbook/ Cash Disbursement Record (CDR) from the Petty Cash Custodian and compare the balance with the balance per GL/SL. 1.3 Check the correctness of the postings in the GL/SL from the Cashbook/ CDR. Check totals/ footings. 1.4 Trace entries from GL to Check Disbursement Journal (CkDJ) and Report of Checks Issued (RCI) (checks issued to the Petty Cash Custodian for the establishment/ replenishment of PCF) and JEVs and Cash Disbursement Journal (CDJ) for the corresponding liquidation. Note discrepancy, if any. 1.5 Examine sample replenishment of expenses for approval and adequacy of documentation. 2.1 Conduct cash count. Check whether the total cash and cash items counted agree with the petty cash fund balance in the SL/GL. 3.1 Check whether the account is properly presented as current asset in the Balance Sheet. 3.2 Prepare AOM for the discrepancies noted. 3.3 Organize working papers including indexing and cross-referencing. PREPARED BY : Date

W P Re f

C EO C EO

C EO C EO VR

C EO C EO

PD

REVIEWED BY : Date

APPROVED BY : Date

. Cash - National Treasury, Modified Disbursement System (MDS) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH National Treasury, Modified Disbursement System (MDS) ( Account Code 108 ) Account Description: This account is used to record in the Regular Agency (RA) books the receipt of Notice of Cash Allocation (NCA) from the Department of Budget and Management (DBM) and/or Notice of Transfer of Allocation (NTA) received from the Central Office/Regional Office thru which cash is withdrawn with the issuance of MDS checks. Audit Objectives: 1. To ascertain the existence or occurrence of the balance of Cash-National Treasury, MDS (net of charges against the NCA). 2. To determine the completeness and regularity of the balance of Cash - National Treasury. 3. To determine whether the account is properly presented and adequate disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity (VR ) Presentation and Disclosure ( PD ). ASSERTIONFS TO BE DON E BY TIME FRAME DATE START ED DATE COMPLE TED REMAR KS

AUDIT PROCEDURES

W P Re f

1.1

Obtain and review agency prepared Bank Reconciliation Statement (BRS). check mathematical accuracy; verify the validity of outstanding checks; check ending balance per books against the SL/GL; check ending balance per books against the Bank Statement.

C EO RO

2.1

Trace the balance per TB to the GL.

C EO

ASSERTIONFS

AUDIT PROCEDURES

W P Re f

TO BE DON E BY

TIME FRAME DATE START ED DATE COMPLE TED REMAR KS

2.2

Check whether receipt of all NCAs are recorded in the Registry of Allotments and NCAs (RANCA) and covered with JEVs and posted in the GJ and GL.

C EO VR C EO

2.3 Review / test check JEVs / disbursements to ensure occurrence of transactions, accuracy of amount, completeness of supporting documents (including copy 1 of RCI, copy 2 of checks and copy 3 of ALOBS) and correctness of accounting entries in the JEVs. 2.4 Verify recording of check disbursements in the CkDJ and analyze accounting entries made. 2.5 Check totals / footings in the Ck DJ and compare with the amount posted in the GL. Take note of the discrepancy, if any.

C EO C EO C EO RO PD

2.6 Check whether the balance per GL tallies with the total amount of all unreleased checks in the Statement of Undeposited Collections (SUC) at year end. 3.1 Check whether the account is properly presented as current asset in the Balance Sheet and disclosure is properly made.

3.2 Prepare and issue AOM for discrepancies noted. 3.3 Organize working papers including indexing and cross-referencing.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

6. Cash in Bank - Local Currency, Current Account NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH in BANK Local Currency, Current Account ( Account Code 111 ) Account Description: This account is used to record deposits/withdrawals in local currency in a current account maintained with AGDB. Audit Objectives: 1. To ascertain the existence or occurrence of Cash in Bank in local currency current account. 2. To determine whether deposits and withdrawals of cash in current account are completely recorded and properly valued at the current exchange rate of the BSP in accordance with existing laws, rules and regulations. 3. To determine whether the account is properly presented and adequate disclosure on any restriction is made in the financial statements.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Rights and Obligations ( RO ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Obtain Bank Statements and examine in detail the agency-prepared Bank Reconciliation Statement (BRS) Compare the ending balance per books with the balance confirmed on the Bank Confirmation form(see 1.2 below). Verify the deposits in transit and outstanding checks. Establish the mathematical accuracy of the reconciliation. Investigate old items such as checks outstanding for a long period of time and unusual items. 1.2 Confirm with the bank the balance of each depository account using the Bank Confirmation form (example in CA-9). Perform the following: Prepare confirmation requests in duplicate and have these signed by an authorized check signatory of the agency. Send both copies to the bank and request that the original be directly returned to the auditor. Send confirmation requests to all banks in which the client has an account, including those that have a zero balance at the end of the year.

C EO

C EO RO

E RO

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.2 Prepare the summary of results of confirmation and compare with SL balances (CA-10). 2.1 2.2 Trace the balance in the Trial Balance to the GL and to the corresponding SL. Obtain the Schedule of the account and trace the details of the Schedule against the SL. Examine postings in the SL against the GL. Check totals/ footings. Check whether the total of all SL balances matches with the controlling account in the GL.

C EO RO C EO C EO

2.3

C EO

2.4 Trace postings to the journals, reports and JEVs. 2.5 Check whether the account is properly presented as current asset in the Balance Sheet and any restrictions on the withdrawal of cash balances are adequately disclosed in the notes to financial statements. 3.1 Prepare and issue AOM for the discrepancies noted. (CA-11 and CA12).

C EO RO PD

PREPARED BY : Date 7.

REVIEWED BY : Date

APPROVED BY : Date

Cash in Bank - Local Currency, Savings Account NAME OF AGENCY

AUDIT PROGRAM FOR THE PERIOD ________________ CASH in BANK Local Currency, Savings Account ( Account Code 112 ) Account Description: This account is used to record deposits/withdrawals in currency, savings account maintained with AGDB. Audit Objectives: 1. To ascertain the existence or occurrence of Cash in Bank, local currency savings account. 2. To determine whether deposits and withdrawals from the savings account are authorized, completely and properly recorded. 3. To determine whether the account is properly presented and any restriction is adequately disclosed in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Rights and Obligations ( RO ), Presentation and Disclosure ( PD ). ASSERTIONFS local

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Confirm bank / passbook balances. Confirm with the bank the balance of each depository account using the Bank Confirmation form and perform the following: Prepare confirmation request in duplicate and have these signed by an authorized check signatory of the agency. Send both copies to the bank, and request that the original be returned directly to the auditor. Send confirmation requests to all banks in which the client has an account, including those that have a zero balance at the end of the year.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2 Compare SL balances with results of confirmation. (example in CA-13). 1.3 Obtain BRS and review the agency prepared BRS and perform the following: compare the ending balance with the balance confirmed on the bank confirmation form; verify the validity of deposits in transit and outstanding checks; verify reconciling items such as bank charges and bank credits and errors to supporting documents; and verify old items such as checks outstanding for a long period of time and unusual items. 2.1 Trace the balance presented in the Trial Balance to the GL and to the corresponding SL for Cash in Banks account. 2.2 Obtain the Schedule of the account. Trace the details of the Schedule against the SL. Examine postings in the SL against the GL. Check totals/footings and compare the total of all SL balances with the controlling account in the GL.

C EO

C EO

C EO

C EO C EO

2.3

2.4 Trace postings to the Journals, Reports, JEV. 2.5 Check whether the interests earned are properly recorded.

C EO C EO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.1 Check whether the balance of the account is properly presented as current asset in the Balance Sheet, and any restrictions on the withdrawal of cash balances are adequately disclosed in the notes to financial statements. 3.2 Prepare and issue AOM for discrepancies noted. 3.1 Organize working papers including indexing and cross-referencing.

RO PD

PREPARED BY :

REVIEWED BY :

APPROVED BY : Date

Date Date 8. Cash in Bank - Local Currency, Time Deposit NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

CASH in BANK Local Currency, Time Deposit ( Account Code 113 ) Account Description: This account is used to record placements in local currency of excess cash or cash not earmarked for immediate use with authorized depository banks for a specified period. Audit Objectives: 1. To ascertain the existence or occurrence of Cash in local currency, time deposits. 2. To determine whether the placement in time deposits are completely and properly recorded. 3. To determine whether placement and termination of time deposits are authorized. 4. To determine whether the account is properly presented and any restriction is adequately disclosed in the financial statements.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Confirm with the bank all Time Deposit placements. 1.2 1.3 Compare results of confirmation with schedule of placements (CA-14). Verify the original copies of the Certificates of Time Deposits(CTD) and check whether the certificates are in the name of the agency.

C EO RO C EO RO C EO RO VR C EO C EO C EO C EO VM C EO VM VR

1.4 Compare the CTDs with the schedule.

2.1 Check the mathematical accuracy of the schedules and reports and compare balances with SL/GL/Trial Balance. 2.2 Verify the correctness of the postings in the GL/SL from the journals and JEV. Check totals/footings. Test sample JEV and supporting documents. Verify terms of placements, particularly the rates of interests and maturity period. Test samples on the computation of interests earned from matured and preterminated placements. Obtain written authority preterminate placements. to

2.3

2.4

2.5

2.6 Prepare working paper for discrepancies noted (see CA-15, CA-15a).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.1 Review the agencys authority to place cash in time deposits from the following: a. Charter, board resolutions, agency policies; b. Local Government Code, Sanggunian/Resolutions for LGUs; c. DBM and/or other duly authorized officials approval for NG. 3.2 Evaluate whether placement made is inline with the operations of the agency or necessary for the attainment of the agencys objectives. 3.3 Check whether Time Deposit placement is approved by authorized official of the agency. 3.4 Obtain written certification from management that all Time Deposits in the name of the agency are free from liens and other restrictions. Obtain and examine relevant board resolutions and verify if there are board resolutions attaching Time Deposits to loans. Check whether all restrictions related to the account including the rates of interest and maturity terms are adequately disclosed in the notes to financial statements. Check whether the account is properly presented as current asset in the Balance Sheet.

VR

EO VR

EO VR VR RO

3.5

VR RO

3.6

RO PD

4.1

PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

4.2

Prepare and issue Audit Observations Memorandum (AOM) for noted discrepancies (CA-16).

4.1 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date Date 9. Cash in Bank - Foreign Currency, Current Account NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

Date

CASH in BANK Foreign Currency, Current Account ( Account Code 115 ) Account Description: This account is used to record foreign currency deposits/withdrawals in a current account maintained with authorized government depository banks. Audit Objectives: 1. To determine the existence or occurrence of cash in foreign currency, current account. 2. To determine whether the deposits and withdrawals in the current account are completely recorded and properly valued at the current exchange rate as of balance sheet date. 3. To determine whether the account is properly presented and adequate disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Confirm bank balances by sending bank confirmations to AGDBs. 1.2 1.3 Compare SL balances with results of confirmation. Obtain Bank Statements and BRS and perform the following: Check balance per bank in the BRS against Bank Statements. Check balance per book in the BRS against GL. Verify the validity of reconciling items. Test check mathematical accuracy. Verify long outstanding reconciling items. Take note of discrepancies.

C EO C EO C EO

2.1 Trace balance to the GL and SL. 2.2 Verify postings journals and documents advice/memo). 2.3 in the GL/SL from the JEV and supporting (debit and credit Check totals/footings.

C EO VM C EO C EO VR EO VM EO VM VM PD

Obtain the BSP foreign exchange rates prevailing at transaction and balance sheet date.

2.3 Test check entries in JEV on the conversion to local currency (peso) at transaction dates. 2.5 Check whether the balance is correctly translated to peso amount using the BSP foreign exchange rate at balance sheet date.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.6

Check whether foreign exchange gain/loss is properly recorded and presented in the Income Statement. Test check the correctness of the computation of interest, if deposit is interest-bearing. Take note of discrepancy. Check whether the account is properly presented in the balance sheet as current asset in the Balance Sheet.

C VM PD C

2.7

3.1

PD

3.2 Check whether the FOREX rate used in converting foreign currency deposits to peso at balance sheet date is disclosed in the notes to financial statement. 3.3 Prepare and issue Audit Observations Memorandum (AOM) for discrepancies noted.

PD

3.3 Organize working papers including indexing and cross-referencing.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

10. Cash in Bank - Foreign Currency, Savings Account

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH in BANK Foreign Currency, Savings Account ( Account Code 116 ) Account Description: This account is used to record foreign currency deposits / withdrawals in savings account maintained with authorized government depository banks. Audit Objectives: 1. To ascertain the existence or occurrence of cash in foreign currency savings account. 2. To determine whether the foreign currency deposits and withdrawals in savings account are completely recorded and properly valued. 3. To determine whether the account is properly presented and adequately disclosed in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

AUDIT PROCEDURES

W P Re f

1.1 Confirm bank balances by sending Bank Confirmations to AGDB. 1.2 1.3 Compare SL balances with results of confirmation. Obtain Bank Statements and BRS and perform the following: Check balance per bank in the BRS against Bank Statements.

C EO C EO C EO

Check balance per book against GL. Verify the validity of reconciling items. Test check mathematical accuracy. Note long outstanding reconciling items and investigate.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1 Trace balance to the GL and SL. 2.2 Verify postings in the GL/SL from the JEVs and supporting documents (debit and credit advice/memo). Check footings 2.3 Obtain from BSP / BTr foreign exchange rates prevailing at transaction and balance sheet dates. 2.4 Test check correctness of conversion to local currency (peso) at transaction dates of entries in the JEVs. 2.5 Check if forex gain/loss is properly recorded and presented in the Income Statement Check whether the balance is correctly translated to peso amount using the BSP exchange rate as at the balance sheet date (CA-17). Test check the correctness of the computation of interest, if deposit is interest-bearing.

C EO C EO EO VM C EO VM C EO PD C EO VM PD C EO VM

2.6

2.7

2.8 Take note of deficiency, if any. 3.1 Check whether the balance of the account is properly presented as Current Asset in the Balance Sheet/ in accordance with the order of presentation in the NGAS Manual. 3.2 See if the FOREX rate used in converting foreign currency deposits to peso at balance sheet date is disclosed in the notes to financial statements.

C PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.3

Prepare and issue Audit Observations Memorandum (AOM) for the discrepancies noted.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

11.

Cash in Bank - Foreign Currency, Time Deposit NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH in BANK Foreign Currency Time Deposit ( Account Code 117 ) Account Description: This account is used to record foreign currency in time deposits maintained with authorized government depository banks. Audit Objectives: 1. To ascertain the existence or occurrence of foreign currency time deposits. 2. To determine whether the time deposits are completely recorded and properly valued. 3. To determine whether Time Deposits placements and terminations are authorized. 4. To determine whether the account is properly presented and adequately disclosed in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Confirm all Time Deposit placements with the bank. 1.2 Compare results of confirmation with Schedule/SL balances.

C EO RO C EO VR C EO VR RO C EO C EO

1.3 Take note of discrepancy, if any. 1.4 Verify the original copies of Certificates of Time Deposits and check that the same are in the name of the agency. 1.5 Compare CTDs with schedule. 2.1 Verify mathematical accuracy of management prepared schedules/ report and determine agreement with SL/GL/TB. Verify the correctness of the postings in the GL/SL from the JEVs. Check footings. Test check JEVs and supporting documents (such as Letter of Authorization issued to AGDBs, Debit and Credit Memo).

2.2

C EO C EO VR C EO VM C EO VM C EO VM

2.3

2.4 Obtain from BSP/BTr foreign exchange rate prevailing at transaction and balance sheet dates. 2.5 Check if upon termination of FCTDs forex differences are recognized and taken up in the books. Check whether the balance is correctly translated to peso amount using the BSP exchange rate as at the balance sheet date.

2.6

ASSERTIONFS

AUDIT PROCEDURES

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2.7

Verify terms of placements especially on interests.

2.8 Test check correctness of computation of interests earned from matured and preterminated placements. 2.9 Verify/ review authority to preterminate placements. 2.10 Prepare working paper. discrepancy, if any. Note

EO VR VM C EO VM VR

3.1 Review the agencys authority to place cash in foreign currency in Time Deposits from the Charter, board resolutions, agency policies, Local Government Code, Sanggunian /Resolutions for LGUs and/or other duly authorized officials approval for NG. 3.2 Evaluate if placement is in-line with the operations of the agency or necessary for the attainment of the agencys objectives. Check whether the Time Deposit placement is approved by proper official of the agency.

VR

3.3

4.1 Check whether the account is properly presented as Current Asset in the Balance Sheet. 4.2 See if adequate disclosures were made in the Notes to Financial Statements on the interest rates and maturity terms of Time Deposits and the forex rate used in translating foreign currency to peso on balance sheet date.

VR

ASSERTIONFS

AUDIT PROCEDURES

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4.3 Prepare summary of noted discrepancies (CA-18, CA-19 and CA-20) and issue AOM. PREPARED BY : Date REVIEWED BY : Date APPROVED BY : Date

B.2.2 Audit Programs for Different Receivable Accounts 1. Accounts Receivable Trade and Allowance for Doubtful Accounts NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ ACCOUNTS RECEIVABLE -TRADE ( Account Code 121 ) ALLOWANCE FOR DOUBTFUL ACCOUNTS ( Account Code 301 ) Account Description: The account Accounts Receivables Trade is used to record the amount due from customers/clients resulting from services rendered, trading/business transactions or sales of merchandise or property which are expected to be collected in the regular course of business or over a definite period.

Audit Objectives: 1. To determine whether receivables represent valid claims against debtors and other parties. 2. To determine whether recorded receivables are owned by the entity as of balance sheet date. 3. To determine whether all valid receivables are completely and properly recorded. 4. To determine whether the related allowance for doubtful accounts is reasonably provided.

5. To determine whether all transactions complied with the existing rules and regulations and policies of the agency. 6. To determine whether the presentation and disclosure of receivables is adequate which includes the classification of receivables into appropriate categories, reporting of receivables pledged as collateral and the related party receivables.

Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ), Completeness ( C ), Valuation or Measurement ( VM ), Validity/Legality or Regularity ( VR ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

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1.1

Obtain aging receivable and

schedule of accounts

a. Check totals. b. Check if the balance reconciles with the general ledger control account. c. Trace individual balances to the subsidiary ledger. d. Test the accuracy of the aging of accounts e. Check non-trade accounts erroneously included in customers accounts. f. Investigate and reclassify significant credit balances. g. Verify whether the schedule contains the following basic information: Name of debtor Address Balance of account Age of account balance Credit terms agreed upon, including limit of credit Referrals for legal action

C EO C EO C EO C EO C EO C EO VR RO VM

ASSERTIONFS

AUDIT PROCEDURES

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1.2 Test accuracy of balances appearing in the subsidiary ledger. Check totals in the subsidiary ledger. Trace samples to underlying records. 1.3 Confirm accuracy of individual balances by direct communication with debtors on a test basis. (See confirmation procedures.) a. Investigate exceptions reported by the debtors and discuss with concerned for proper disposition. b. If the request does not produce a reply from the customer, perform extended procedures, such as: Review collections after yearend; Check supporting documents; Discuss the account with concerned official. c Prepare a summary of confirmation results. 1.4 Review correspondence with debtors for possible adjustments.

C EO

C EO

VR EO EO VR VM C EO EO VM VR

1.5 Request the legal office for the status of accounts referred to them for collections 1.6 Take note of deficiencies, if any. Prepare and issue AOM.

ASSERTIONFS

AUDIT PROCEDURES

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2.1 Test propriety of cut-off: a. Examine sales recorded several days before and after the balance sheet date and ascertain whether the sales was recorded in the proper period. b. Verify subsequent collection of receivable. Investigate the nature and origin of any unusually large balances in the accounts. 2.2 Review entries in the general ledger on a test basis.

VM C EO VM

EO VR C EO VR

For debits to the account: a. Trace postings to the subsidiary ledger, JEVs, supporting billing statements, invoices or other documents. b. Regularity c. Authorization and approval d. Validity e. Accuracy f. Numerical sequence of bills and invoices For credits to the account : a. Trace postings to the JEV, Report of Collections and Deposits (RCD) and Cash Receipt Journal (CRJ)/GJ. 2.3 Take note of deficiencies, if any. Prepare and issue AOM. C EO VR

ASSERTIONFS

AUDIT PROCEDURES

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3.1 Perform analytical procedures, like: a. Accounts Receivable turnover. Compute the turnover of receivables and compare it with that of the preceding year and indicating averages. Obtain explanation from agency for unusually low turnover rate. b. Ratio of accounts written off to balance of accounts receivable. Compare with prior year and obtain managements 3.2 Compare a sample of shipping documents to the related invoices for orders which have been shipped but not billed. 4.1 Examine the entry recording the current years provisions and the procedures used by the client in computing the allowance for doubtful accounts. 4.2 Where provisions are made formula based on the determine by reference to the agencys procedures basis is: by the use of aged listing, the details of whether the VM

VM

C EO VR VM

Va/L R VM

a. consistent with prior years; b. appropriate to the circumstances of the business; and c. in accordance with the accounting policy. 4.3 Trace the account Bad debts expense to the general ledger.

ASSERTIONFS

AUDIT PROCEDURES

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4.4 Check accuracy of agencys computation of bad debts. 4.5 Evaluate the reasonableness of the basis of allowance for doubtful accounts, loss experience of prior year, data on subsequent collections, opinion of credit manager and collection lawyers, results of circularization, and other pertinent information. 4.6 Review individual balances and age of accounts and evaluate accounts that should be written off. Obtain and examine the list of debts written off during the year. Check totals and verify whether debts written off are no longer included as part of receivable

C VR VM VR VM

C EO VM C EO VM C EO VM C EO VM VR

4.7 4.8

4.9 Inquire if continuous follow up is made on debts written off and verify whether there are collections received and these are properly accounted for. 4.10 Check whether the list of debts written off is properly kept and controlled. 4.11 Take note of deficiencies, if any. Prepare and issue AOM.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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5.1

Review the agencys legal basis like Circulars and / or Board Resolutions on provision for doubtful accounts and writing off bad debts: a. Examine proper authorization of provision for doubtful accounts; b. Examine proper authorization for all debts written off. VR VM VR VM

6.1 Review adequacy of disclosures made on provision for doubtful accounts and writing off bad debts with those required by generally accepted accounting principles. There should be disclosure on the pledging or assigning of accounts receivable. Evidence of such activities can also be obtained from a review of the minutes of board of directors meetings and inquiry from management. 6.2 Check whether the account is presented in the balance sheet as current assets. 6.1 Take note of deficiencies, if any. Prepare and issue AOM.

VR RO PD

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

1. Notes Receivable NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ NOTES RECEIVABLE ( Account Code 122 ) Account Description: The account Notes Receivable is used to record the value of promissory notes, time drafts, trade acceptances and other negotiable short-term instruments from trade debtors. Audit Objectives: 1. To determine whether receivables represent valid claims against debtors and other parties. 2. To determine whether all notes receivables are owned by the entity as of balance sheet date. 3. To determine whether all valid receivables are completely and properly recorded. 4. To determine whether the related allowance for doubtful notes is reasonably provided. 5. To determine whether the presentation and disclosure of notes receivables is adequate including the reporting of any receivables pledged as collateral and the related party receivables. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ), Completeness ( C ), Valuation or Measurement ( VM ), Validity/Legality or Regularity ( VR ) Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

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1.1 Prepare or obtain a Schedule of the Notes Receivable as of balance sheet date.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.2 Trace beginning balance appearing in the GL to prior years working paper. 1.3 Check the balances of the schedules against the GL. 1.4 Verify the correctness of postings in the SL through the General Journal (GJ) to the journal entry voucher (JEV). 1.5 Check totals in the GL and SL. 1.6 Send confirmation letters to debtors. (See confirmation procedures for the steps to be followed.) Include in each request for confirmation the following: balance of the principal, date, maker, due date, interest rate, date through which interest has been paid and collateral, if any. 2.1 Examine selected debits and credits after balance sheet date to determine whether there are unrecorded notes receivable and collections for the year under audit but which were erroneously taken up in the subsequent year.

C EO C EO C EO C EO C EO RO

C EO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.2

Review the entries in the GL. For debits to the account: Trace postings to the subsidiary ledger, JEVs, supporting promissory notes and other documents. Examine individual source documents such as promissory notes or other documents for: C EO RO C EO Va/R L

Regularity Authorization and approval Validity Accuracy

For credits to the account: Trace postings to the JEV, Report of Collections and Deposits (RCD) and Cash Receipts Journal (CRJ)/GJ. C EO

3.1 Perform analytical procedures like notes receivable turnover. Compute the turnover of receivables and compare it with that of the preceding year indicating averages. Obtain explanation from agency for unusually low turnover rate. 3.2 Compare a sample of shipping documents to the related invoices for orders which have been shipped but not billed.

C EO VM

C EO VM

ASSERTIONFS

AUDIT PROCEDURES

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4.1 Examine and verify the correctness of the aging schedule of debtors balances as of balance sheet date. Note down long outstanding, dormant and unusually large balances in the accounts. Investigate the reasons. 4.2. Examine promissory notes and determine whether the terms and conditions were strictly enforced. 4.3 Review allowance provided for notes. Agencies engaged in business in in which note transactions are

C EO RO VM

C EO VR VM C EO VR VM

voluminous normally set up a separate allowance for doubtful notes. Agencies accepting only a few notes normally provide an amount in the allowance for doubtful accounts to take care of possible note losses. 4.4 For notes written off during the year, examine notes and approval of write off. Check whether complete records are maintained for notes written off and are kept by a responsible employee. C EO VR VM C EO C EO VM C EO VM VR RO

4.5

4.6 Ensure that a complete follow up of notes written off is made and collections received are properly accounted for. 4.7 Follow up subsequent collection of notes and the corresponding interest. 4.8 Examine collateral and determine their adequacy to secure the notes.

ASSERTIONFS

AUDIT PROCEDURES

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5.1 Check whether the account is presented in the balance sheet as current assets except for long-term notes. Notes receivable may either be combined with or separated from accounts receivable. See that it conforms to the provisions of the NGAS. 5.2 Review adequacy of disclosures made with those required by generally accepted accounting principles. There should be disclosure of the pledging or assigning of notes. Evidence of such activities can also be obtained from a review of the minutes of board of directors meetings and inquiry from management. 5.3 Take note of all the deficiencies. Prepare and issue AOM.

VR PD

VR RO PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

2.

Due from Officers and Employees

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE FROM OFFICERS and EMPLOYEES ( Account Code 123 ) Account Description: The account Due from Officers and Employees is used to record the amount of cash advances granted for official travels and other collectibles from government agencys officers and employees. Audit Objectives: 1. To determine whether the account represents valid claims of the agency. 2. To determine whether all valid accounts are completely and properly recorded. 3. To determine whether the reported balance of the account at balance sheet date is realizable. 4. To determine whether all transactions complied with the existing rules and regulations and policies of the agency. 5. To determine whether the account is properly presented and adequate disclosure is made in the financial statements. Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Valuation or Measurement ( VM ), Validity/Legality or Regularity ( VR ) Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1

Confirm individual balances by direct communication with officers and employees on a test basis. (See confirmation procedures for the steps to be followed.)

C EO RO

1.2 Review correspondence with officers and employees for possible adjustments. 1.3 Request the legal office for the status of accounts referred to them for collections. 1.4 1.5 1.6 Trace the account balance to the trial balance and to the general ledger (GL). Trace the beginning balance appearing in the GL to prior years working paper. Obtain aging schedule of the account Due from Officers and Employees as of balance sheet date. Check totals/footings and compare with the GL balance of the account. Check the details of schedule against the subsidiary ledgers (SL).

VR RO VR C EO C EO C EO C EO C EO C EO

1.7

1.8

1.9 Test accuracy of balances appearing in the SL of each officer and employee with advances. Foot and cross foot the subsidiary ledgers. 1.10 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). Review entries in the GL on a test basis.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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For debits to the account, examine the individual voucher and supporting document for: regularity and validity of supporting document authorization/approval correctness of computation

For credits to the account, examine the liquidation report and its supporting documents for: 2.1 regularity and validity of supporting documents authorization and approval correctness of computation C EO VR

Compute the turn-over rate of receivables and compare it with that of the preceding year. Obtain explanation from management for unusually low turn over rate.

3.1 Examine the entry recording the current years provisions and the procedures used by the client in computing the allowance for doubtful accounts.

C EO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.2 Where provisions are made by the use of formula based on the aging schedule, determine by reference to the details of the agencys procedures whether the basis is : a. consistent with prior years; b. appropriate to the circumstances of the business; and c. in accordance with the accounting policy. 3.3 Trace bad debts expense to the general ledger. 3.4 Check accuracy of agencys computation of bad debts 3.5 Evaluate the reasonableness of the basis of allowance for doubtful accounts, loss experience of prior year, data on subsequent collections, opinion of credit manager and collection lawyers, results of circularization, and other pertinent information. 3.6 Review individual balances and age of accounts and evaluate accounts that should be written off.

EO VR VM

C EO VM C EO VM C EO VR VM

C EO VM C EO VM C EO VM

3.7 Obtain and examine list of debts written off during the year. 3.8 Check totals and verify whether bad debts written off are no longer included as part of receivable.

ASSERTIONFS

AUDIT PROCEDURES

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3.9 Check whether the list of debts written off is properly kept and controlled. 3.10 Inquire if continuous follow up is made on debts written off and verify whether there are collections received and these are properly accounted for. 4.1 Review the agencys legal basis like Circulars and/or Board Resolutions and accounting manuals and policy on: Provision for doubtful accounts Writing off bad debts Liquidation of cash advances

C Va/L R C EO

VR VM

5.1 Review adequacy of disclosures made with those required by generally accepted accounting principles.

VR PD

5.2 Check whether the account is presented in the balance sheet as current assets. 5.3 Note abnormal balances which when taken together represent a significant amount and analyze if reclassification is necessary. 5.4 Verify whether the inclusion in the balance of dormant/non-moving accounts and the doubtful collectibility thereof are adequately disclosed . 5.5 Take note of deficiencies, if any. Prepare and issue AOM.

PD C EO VR PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

4. Loans Receivable-GOCCs (124); Loans Receivable-LGUs (125) ; Receivables-Others (126) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ LOANS RECEIVABLE - _________ ( Account Code _____ )

Loans

Account Description: The account Loans Receivable is used to record the amount of loans due from GOCCs, LGUs and entities other than GOCCs and LGUs. . Audit Objectives: 1. 2. 3. 4. To determine whether loans receivable represents valid claims of the agency. To determine whether all loans receivable are owned by the agency as of audit date. To determine whether all valid loans receivable are completely and properly recorded. To determine whether the related allowance for doubtful accounts is reasonably provided and properly recorded. 5. To determine whether all transactions complied with the existing rules and regulations and policies of the agency. 6. To determine whether the account is properly presented in the financial statements and adequate disclosure is made.

Assertions: Existence or Occurrence ( EO ), Rights and Obligation (RO) , Completeness ( C ), Valuation or Measurement ( VM ), Validity/Legality or Regularity ( VR ) Presentation and Disclosure ( PD ). ASSERTIONFS TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

AUDIT PROCEDURES

W P Re f

1.1

Confirm individual balances by direct communication with debtors. (See confirmation procedures for the steps to be followed.)

C EO RO

1.2 Trace the FS balance to the trial balance and to the general ledger (GL). 1.3 1.4 1.5 1.6 Trace the beginning balance appearing in the GL to prior years working paper Obtain aging schedule of the account as of balance sheet date. Check totals/footings and compare with the GL /SL balances of the account. Check the details of the schedule against the subsidiary ledgers (SL).

C EO C EO C EO C EO C EO C EO

1.7 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). 2.1 Test propriety of cut-off: a. Examine sales recorded a few days before and after the balance sheet date and verify whether the sales were recorded in the proper period. b. Verify subsequent collection of receivable. Investigate the nature and origin of any unusually large balances in the accounts.

C EO VM C EO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.2

Review entries in the general ledger on a test basis. For debits to the account: Trace postings to the subsidiary ledger, JEVs, supporting billing statements, invoices or other documents. Examine individual source documents such as billing statements, invoices or other documents for: Regularity Authorization and approval Validity Accuracy Numerical sequence of bills and invoices

For credits to the account Trace postings to the JEV, Report of Collections and Deposits (RCD) and Cash Receipt Journal (CRJ)/GJ. Compute the turn-over rate of receivables and compare it with that of the preceding year. Obtain explanation from management for unusually low turn over rate. Examine selected debits and credits after balance sheet date to determine whether there were unrecorded loans receivable and collections for the year under audit but which were erroneously taken up in the subsequent year.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.1 Examine and verify the correctness of the aging schedule of debtors balances as of Balance Sheet date. Note down long outstanding, dormant and unusually large balances in the accounts. Investigate the reasons.

3.2 Examine the entry recording the current years provisions and the procedures used by the client in computing the allowance for doubtful accounts. 3.3 Where provisions are made formula based on the determine by reference to the agencys procedures basis is: by the use of aged listing, the details of whether the

a. consistent with prior years; b. appropriate to the circumstances of the business; and c. in accordance with the accounting policy. 3.4 Trace bad debts expense to the general ledger.

3.5 Check accuracy of agencys computation of bad debts.

3.6 Evaluate the reasonableness of the basis of


allowance for doubtful accounts, loss experience of prior year, data on subsequent collections, opinion of credit manager and collection lawyers, results of circularization, and other pertinent information.

C EO Va/L R VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.7

Review individual balances and age of accounts and evaluate accounts that should be written off.

C EO RO C EO C EO RO C C EO VM VR

3.8 Obtain and examine list of debts written off during the year. 3.9 Check totals in the list and verify whether debts written off are no longer included as part of receivable. 3.10 Check whether the list of debts written off is properly kept and controlled.

3.11 Inquire if continuous follow up is made on debts written off and verify whether there are collections received and these are properly accounted for. 4.1 Review the agencys legal basis like Circulars and/or Board Resolutions on provision for doubtful accounts and writing off bad debts. Examine Memorandum of Agreement / Letter of Authority and determine whether the terms and conditions were strictly enforced.

4.2

VR

5.1 Check whether the account is presented in the balance sheet as current assets except for long-outstanding loans receivable. See that it conforms with the provisions of the NGAS. 5.2 Verify whether the inclusion in the balance of dormant/non-moving accounts and the doubtful collectibility thereof are adequately disclosed in the financial statements.

VR PD

PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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5.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

5. Real Property Tax Receivable ; Special Education Tax Receivable

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ REAL PROPERTY TAX RECEIVABLE ( Account Code 127) SPECIAL EDUCATION TAX RECEIVABLE ( Account Code 128 ) Account Description: The account Real Property Tax (RPT) Receivable is used to record the amount of basic real property tax due from real property owners. The account Special Education Tax (SET) Receivable is used to record the amount of additional levy on real property tax due from real property owners for the Special Education Fund.. Audit Objectives: 1. represent valid claims of the agency. 2. agency as of balance sheet date. 3. completely and properly recorded. 4. 5. To determine whether the reported balances of the accounts at balance sheet date are realizable. To determine whether the accounts are properly presented and adequately disclosed in the financial statements.. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). To determine whether all valid RPT/SET receivables are To determine whether all receivables are owned by the To determine whether the RPT/SET receivables

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Confirm individual balances on a test basis. (See confirmation procedures for the steps to be followed.) Trace the FS balance to the trial balance and to the general ledger (GL). Trace beginning balance appearing in the GL to prior years working paper.

C EO C C EO C EO C EO C EO C EO

1.2 1.3

1.4 Obtain Schedule of the account. 1.5 Check totals/footings and compare with the GL balance of the account. 1.6 Check the details of the schedule against the subsidiary ledgers (SL). 1.7 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). 1.7 Check footings and cross footings of the GL and SL. 2.1 Check whether collections after the balance sheet date are recorded in the proper period . 2.2 Examine dishonored checks for several days before and after balance sheet date to determine whether any significant adjustments are necessary at balance sheet date.

C EO C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.3 Investigate material credit balances on the schedule and consider possibility of advance payments, unrecorded receivable or erroneous entry. Review the JEV setting - up the RPT / SET receivable at the beginning of the year based on the list of taxpayers with the amount due and collectible for the year duly certified by the treasurer. See to it that the details of the list are reflected in the RPT Account Registers/Taxpayer Index Cards. 3.2 Compare the receivable set up in the current year with that of the previous year, and investigate significant fluctuations. 3.3 Select sample entries from the Assessment Roll and compute the amount of RPT/SET due for the year taking into consideration the following: Class of property Assessed value Tax rate

C EO Va/R L

C EO Va/L R

C EO

C Va/L R RO

3.3 Trace samples selected in Step 2.3 to the certified list and Real Property Tax Account Register (RPTAR)/Taxpayer Index Card and compare the RPT/SET as computed to the amounts shown in the two documents. 3.5 Obtain a listing of taxpayers who paid in advance their RPT/SET for the

C EO RO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

current year and check that their names are not included in the certified list used as basis in setting up the receivables. 3.6 Review / verify the general ledger entries made for the current year. Trace debits to the General Journal, JEVs and supporting documents. Trace credits to the General Journal, JEVs and supporting documents, Report of Collections and Deposits and Cash Receipts Journal.

RO C EO VR RO

4.1 Obtain

delinquency report from management. Inquire into managements action on delinquent accounts. Check whether appropriate legal remedies are considered to enforce collection. Examine the aging schedule of debtors balances as of balance sheet date. Take note of long outstanding, dormant and unusually large balances in the accounts and verify reasons. years provisions and the procedures used by the client in computing the allowance for doubtful accounts.

C EO VR VM C EO VR RO VM C VR VM C EO VR VM

4.2

4.3 Examine the entry recording the current

4.4 Where provisions are made formula based on the determine by reference to the agencys procedures basis is:

by the use of aged listing, the details of whether the

a. consistent with prior years;

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

b. appropriate to the circumstances of the business; and c. in accordance with the accounting policy. 4.5 Trace bad debts expense to the general ledger. C EO C EO VM C EO VR VM

4.6 Check accuracy of agencys computation of bad debts. 4.7 Evaluate the reasonableness of the basis of allowance for doubtful accounts, loss experience of prior year, data on subsequent collections, opinion of credit manager and collection lawyers, results of circularization, and other pertinent information. Review individual balances and age of accounts and analyze accounts that should be written off. Obtain and examine listing of debts written off during the year.

4.8

4.9

4.10 Check totals in the listing and verify whether debts written off are no longer included as part of receivable. Check whether the list of debts written off is properly kept and controlled. 4.11 Inquire whether follow up is made on debts written off and verify whether collections received are properly accounted for.

C EO RO VM C EO VM C EO RO VM C EO RO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

4.12 Check whether the account is presented in the balance sheet as current assets. See to it that it conforms to the provisions of the NGAS. 5.1 Review loan agreements, related confirmation replies, and other relevant documents if any portion of the account was pledged as collateral and check appropriateness of disclosure.

VR PD C EO VR RO PD

5.2 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

6. Interest Receivable NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INTEREST RECEIVABLE ( Account Code 129) Account Description: The account Interest Receivable is used to record the amount of interest earned and due from short term/long term investments. Audit Objectives: 1. 2. 3. 4. To determine whether interest receivable represents valid claims of the agency. To determine whether all receivables are owned by the agency as of balance sheet date. To determine whether all valid receivables are completely and properly recorded. To determine whether the related allowance for doubtful accounts is reasonably provided. 5. To determine whether the account is properly presented and disclosed in the financial statements. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Valuation or Measurement ( VM ), Validity/Legality or Regularity ( VR ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Confirm individual balances on a test basis. (See confirmation procedures for the steps to be followed.) Trace the beginning balance appearing in the GL to prior years working paper. as

EO RO C EO C EO

1.2

1.3 Obtain aging schedule of the account of balance sheet date.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.4 Check the details of the schedule against the subsidiary ledgers (SL). 1.5 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). 1.6 Check totals of the GL, SL and schedule. 2.1 Examine selected debits and credits after balance sheet date to determine whether there are unrecorded interests receivable and collections for the year under audit but were erroneously taken up in the subsequent year. For credits to the account: Trace postings to the JEV, Report of Collections and Deposit (RCD) and Cash Receipts Journal (CRJ)/GJ. 2.2 Review the entries in the GL. For debits to the account: Trace postings to the supporting documents. SL, JEV,

C EO C EO C EO C EO VM

C EO

Examine individual source documents such as promissory notes, loan contracts, investment documents or other related documents for: Regularity Authorization and approval Validity Accuracy

C EO VR RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.1

Perform analytical procedures like accounts receivable turnover. Compute the turnover of receivables and compare it with that of the preceding year indicating averages. Obtain explanation from agency for unusually low turnover rate. Analyze the aging schedule of debtors balances as of balance sheet date. Take note of long outstanding, dormant and unusually large balances in the accounts.

C VR VM

C EO VR RO VM C EO VM C EO VR VM

4.2 Analyze the entry recording the current years provisions and the procedures used by the client in computing the allowance for doubtful accounts. 4.3 Where provisions are made by the use of formula based on the aged listing, determine by reference to the details of the agencys procedures whether the basis is: a. consistent with prior years; b. appropriate to the circumstances of the business; and c. in accordance with the accounting policy. Trace bad debts expense to the general ledger. Check accuracy of agencys computation of bad debts. Evaluate the reasonableness of the basis of allowance for doubtful accounts, loss experience of prior year, data on subsequent collections

C EO C VM C EO VR RO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

collections, opinion of credit manager and collection lawyers, results of circularization, and other pertinent information. Review individual balances and age of accounts and evaluate accounts that should be written off. Obtain and examine list of debts written off during the year. Check totals in the list and verify whether debts written off are no longer included as part of receivable. Check whether the list of debts written off is properly kept and controlled. Inquire if continuous follow up is made on debts written off and check whether there are collections received and these are properly accounted for. 5.1 Check the propriety of the presentation of the account. See that it conforms to the provisions of the NGAS. 5.2 Check whether adequate disclosure has been made in the financial statements. 5.3 Take note of all discrepancies and prepare AOM. C EO RO C EO C EO RO C EO C EO RO C VR PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

7.

Due from National Government Agencies (NGAs) Due from National Treasury NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE FROM NATIONAL GOVERNMENT AGENCIES ( Account Code 136) DUE FROM NATIONAL TREASURY ( Account Code 131 ) Account Description: The account Due from NGAs is used to record the amount due from departments, bureaus and other offices of the National Government (NG). Audit Objectives: 1. 2. 3. 4. 5. To determine whether all receivables represent valid claims of the agency against NGAs. To determine whether all valid receivables are completely and properly recorded. To determine whether the reported balances of the account at balance sheet date are realizable. To determine whether all transactions complied with existing rules and regulations and policies of the agency. To determine the propriety of the accounts presentation in the financial statements and the adequacy of disclosure.

Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the beginning balance appearing in the GL to prior years working paper.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2 Obtain a schedule of receivables which should contain the following basic information: name of the agency address balance of account date reported age of the accounts balance referral for legal action, off/condonation

C EO

write C EO EO C EO C EO C EO Va/L R RO C EO VR RO C EO

1.3 Check totals in the schedule , SL and trace to GL. 1.4 Select samples from the schedule for verification.

1.5 Compare the schedule against the SL and GL. 1.6 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). 1.7 Review the liquidation documents to validate the propriety of the expenses charged vis--vis the stated purpose of the fund transfer. Verify credit balances in the accounts, if any.

2.1

2.2 Review the entries in the GL. For debits to the account: Trace posting to the subsidiary ledger, JEVs.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

Examine individual source documents : Regularity Authorization and approval Validity Accuracy

C EO VR

For credits to the account: Trace postings to the JEV, Report of Collections and Deposits (RCD) and Cash Receipts Journal (CRJ)/GJ. 3.1 Perform analytical procedures, like: a. Accounts Receivable turnover. Compute the turnover of Due from NGAs and compare it with that of the preceding year and indicating averages. Obtain explanation from agency for unusually low turnover rate. b. Ratio of accounts written off to balance of Due from NGAs. Compare with prior year and obtain managements explanation for unusually high ratio. 4.1 Review the aging schedule of the account. 4.2 Analyze the ratio of dormant/ nonmoving accounts to total receivables. 4.3 Select samples of long outstanding or overdue accounts. C EO VM C EO VM EO

C EO C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

Review the subsidiary details and inquire from management what actions have been taken on dormant and non-moving accounts. Assess the probability of collection and evaluate the impact on the financial position of the agency. 5.1 Check whether the account is presented in the balance sheet as current assets and that it conforms to the provisions of the NGAS. 5.2 Check whether the inclusion in the balance of dormant/non-moving accounts and the doubtful collectibility thereof are adequately disclosed.

C EO VR RO VM EO RO PD VR PD

PD

5.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

8.

Due from Government-Owned and Controlled Corporations NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE FROM GOVERNMENT-OWNED and CONTROLLED CORPORATIONS ( Account Code 137) Account Description: The account Due from Government Owned and Controlled Corporations (GOCCs) is used to record the amount due from GOCCs including Government Financial Institutions (GFIs). Audit Objectives: 1. To determine whether the account Due from GOCCs represents valid claim of the agency. 2. To determine whether all receivables are owned by the agency as of balance sheet date. 3. To determine whether all valid Due from GOCCs are completely and properly recorded. 4. To determine whether the reported balances of the account at balance sheet date are realizable. 5. To determine whether the account is proper presented in the financial statements and adequate disclosure is made . Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Prepare confirmation requests for the selected GOCCs. 1.2 Trace the FS balance to the trial balance and to the general ledgers (GL).

EO RO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Trace the beginning balance appearing in the GL to prior years working paper. 1.4 Secure a schedule of Due from GOCCs which should contain the following information: Name of the agency Address Balance of account Date reported Age of the accounts balance Referral for legal action, off/condonation

C EO C EO

write C EO C EO C EO C EO VR

1.5 Check footings of schedule and compare with GL balance. 1.6 Check the details of the schedule of Due from GOCCs against the SL. 1.7 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). 2.1 Examine individual source documents such as JEVs, DVs, MOA and other documents for: 2.2 Regularity Authorization and approval Validity Accuracy

Verify whether the required rules and regulations are incorporated in the Memorandum of Agreement (MOA). (COA Circular # 96-003 dated February 27, 1996.)

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.1 Perform analytical procedures, like: a. Accounts Receivable turnover. Compute the turnover of Due from GOCCs and compare it with that of the preceding year indicating averages. Obtain explanation from agency for unusually low turnover rate. b. Ratio of accounts written off to balance of Due from GOCCs. Compare with prior year and obtain managements explanation for unusually high ratio. 3.2 Review the aging schedule of the account. 4.1 Analyze the ratio of dormant/non-moving accounts to total receivables. 4.2 Select samples of long outstanding or overdue accounts. C EO RO

C EO RO

C EO VM C EO VM EO VM C EO VM C EO VM VR PD

4.3 Review the subsidiary details and inquire from management what actions have been taken on dormant and non-moving accounts. 4.4 Assess the probability of collection and evaluate the impact on the financial position of the agency. 5.1 Check whether the account is presented in the balance sheet as current assets and it conforms to the provisions of the NGAS.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

5.2

Check whether the inclusion in the balance of dormant/non-moving accounts and the doubtful collectibility there of are adequately disclosed in the financial statements.

PD

5.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

9. Due from Local Government Units

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE FROM LOCAL GOVERNMENT UNITS ( Account Code 138) Account Description: The account Due from Local Government Units (LGUs) is used to record the amount due from provinces, cities, municipalities, barangays and other local government units. Audit Objectives: 1. To determine whether Due from LGUs represents valid claims against debtors and other parties. 3. To determine whether all receivables are owned by the entity as of balance sheet date. 4. To determine whether all valid Due from LGUs are completely and properly recorded. 5. To determine whether the reported balances of the account at balance sheet date are realizable. 6. To determine the propriety of the accounts presentation in the financial statements and the adequacy of disclosure. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Prepare confirmation requests for the selected LGUs.

EO RO C EO

1.2 Trace the FS balance to the trial balance and to the General Ledger (GL).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Trace the beginning balance appearing in the GL to prior years working paper. 1.4 Secure a schedule of Due from LGUs which should contain the following information: Name of the agency Address Balance of account Date reported Age of the accounts balance Referral for legal action, write off/ condonation

C EO C EO RO

1.5 Check totals of schedule and compare with GL balance. 1.6 Check the details of the schedule of Due from LGUs against the SL. 1.7 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). 2.1 Examine individual source documents such as JEVs, DVs, MOA and other documents for: Regularity Authorization and approval Validity Accuracy

C EO C E C EO C EO VR

Verify whether the required rules and regulations are incorporated in the MOA (COA Circular # 96-003 dated February 27, 1996.)

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.1 Perform analytical procedures, like: a. Accounts Receivable turnover. Compute the turnover of Due from LGUs and compare it with that of the preceding year and indicating averages. Obtain explanation from agency for unusually low turnover rate. b. Ratio of accounts written off to balance of Due from LGUs. Compare with prior year and obtain managements explanation for unusually high ratio. c. Review the aging schedule of the account. C EO VM

C EO VM

4.1 Analyze the ratio of dormant/ non-moving accounts to total receivables. 4.2 Select samples of long outstanding or overdue accounts.

4.3 Review the subsidiary details and inquire from management what actions have been taken on dormant and non-moving accounts. 4.4 Assess the probability of collection and evaluate the impact on the financial position of the agency. 5.1 Check whether the account is presented in the balance sheet as current assets and that it conforms to the provisions of the NGAS.

E EO VM C EO VM C EO VM VM PD

VM PD VR PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

5.2

Check whether the inclusion in the balance of dormant/non-moving accounts and the doubtful collectibility thereof are adequately disclosed. Take note of deficiencies, if any. Prepare and issue AOM.

PD

5.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

10. Due from Non-Governmental Organizations/ Peoples Organizations NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE FROM NON-GOVERNMENTAL ORGANIZATIONS/ PEOPLES ORGANIZATIONS ( Account Code 139) Account Description: The account Due from Non-Government Organizations (NGOs)/Peoples Organizations (POs) is used to record the release of funds entrusted to NGOs/POs for the implementation of government projects. Audit Objectives: 1. To determine whether Due from NGOs/POs represents valid claims against debtors and other parties. 2. To determine whether all receivables are owned by the entity as of balance sheet date. 3. To determine whether all valid Due from NGOs/POs are completely and properly recorded. 4. To determine whether the reported balances of the account at balance sheet date are realizable. 5. To determine the propriety of the accounts presentation in the financial statements and the adequacy of disclosure. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Prepare confirmation requests for the selected NGOs/POs.

C EO C EO

1.2 Trace the FS balance to the trial balance and to the general ledgers (GL).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Trace the beginning balance appearing in the GL to prior years working paper. 1.4 Secure a schedule of Due from NGOs/POs which should contain the following information: 1.5 Name of the agency Address Balance of account Date reported Age of the accounts balance Referral for legal action, write off/condonation

C EO C EO

Check totals of schedule and compare with GL balance.

C EO C EO C EO

1.6 Check the details of the schedule of Due from NGOs/POs against the SL. 1.7 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV).

2.1 Examine individual source documents such as JEVs, DVs, MOA and other documents for: Regularity Authorization and approval Validity Accuracy 2.2 Check whether the required rules and regulations are incorporated in the MOA (COA Circular # 96-003 dated February 27, 1996.) Perform analytical procedures, like: VR

3.1

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

a. Accounts Receivable turnover. Compute the turnover of Due from NGOs/POs and compare it with that of the preceding year and indicating averages. Obtain explanation from agency for unusually low turnover rate. b. Ratio of accounts written off to balance of Due from NGOs/POs. Compare with prior year and obtain managements explanation for unusually high ratio. 4.1 Review the aging schedule of the account.

C EO RO VM

C EO RO VM C EO VM C EO VM C EO VM C EO VM

4.2 Analyze the ratio of dormant/non-moving accounts to total receivables. 4.3 Select samples of long outstanding or overdue accounts. 4.4 Review the subsidiary details and inquire from management what actions have been taken on dormant and non-moving accounts. 4.5 Analyze whether there is probability of collection and evaluate the impact on the financial position of the agency. 5.1 Check whether the account is presented in the balance sheet as current assets and that it conforms to the provisions of the NGAS. 5.2 Check whether the inclusion in the balance of dormant / non moving

VM PD VR PD

PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

accounts and the doubtful collectibility thereof are adequately disclosed. 5.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

11. Due from Other Funds (144); Due from Central Office/Home Office (141); Due from Regional Offices/Staff Bureau/Branch Offices (142) ; Due from Operating Units (143) ; Due from Subsidiaries/Affiliates (145) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE FROM ______________ ( Account Code ______ ) Account Description: The account Due from Other Funds is used to record the amount due from other funds maintained by the agency. Audit Objectives: 1. To determine whether Due from Other Funds represents valid claims against debtors and other parties. 2. To determine whether all receivables are owned by the entity as of balance sheet date. 3. To determine whether all valid Due from Other Funds are completely and properly recorded. 4. To determine whether the reported balances of the account at balance sheet date are realizable. 5. To determine the propriety of the accounts presentation in the financial statements and the adequacy of disclosure. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Prepare confirmation requests for the selected accounts.

EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2 1.3 1.4

Trace the FS balance to the trial balance and to the general ledgers (GL). Trace the beginning balance appearing in the GL to prior years working paper. Secure a schedule of Due from Other Funds which should contain the following information: Name of the agency Address Balance of account Date reported Age of the accounts balance Referral for legal action, write off/condonation

C EO C EO C EO

1.5 Check totals of schedule and compare with GL balance. 1.6 1.7 Check the details of the schedule of Due from Other Funds against the SL. Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV).

C EO C EO C EO C VR

2.1 Examine individual source documents such as JEVs, DVs, MOA and other documents for: Regularity Authorization and approval Validity Accuracy

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.1 Perform analytical procedures, like: a. Accounts Receivable turnover. Compute the turnover of Due from Other Funds and compare it with that of the preceding year and indicating averages. Obtain explanation from agency for unusually low turnover rate. b. Ratio of accounts written off to balance of Due from Other Funds. Compare with prior year and obtain managements explanation for unusually high ratio. 4.1 Review the aging schedule of the account.

E EO RO

C EO C VM EO RO C RO

4.2 Analyze the ratio of dormant/non-moving accounts to total receivables. 4.3 Select samples of long outstanding or overdue accounts.

4.4 Review the subsidiary details and inquire from management what actions have been taken on dormant and non-moving accounts. 4.5 Assess the probability of collection and evaluate the impact on the financial position of the agency.

E VM VR PD

5.1 Check whether the account is presented in the balance sheet as current assets and that it conforms to the provisions of the NGAS.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

5.2

Check whether the inclusion in the balance of dormant/non-moving accounts and the doubtful collectibility thereof are adequately disclosed.

PD

5.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

12. Receivable- Disallowances/Charges

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ RECEIVALE DISALLOWANCE AND CHARGES ( Account Code 146 ) Account Description: The account Receivable Disallowances/Charges is used to record the amount due from public/private individuals/entities for audit disallowances/charges which have become final and executory. Audit Objectives: 1. To determine whether the account represents valid disallowances/charges. 2. To determine whether all receivables are owned by the entity as of balance sheet date. 3. To determine whether all valid disallowances/ charges are completely and properly recorded. 4. To determine whether the reported balances of the account at balance sheet date are realizable. 5. To determine the propriety of the accounts presentation in the financial statements and the adequacy of disclosure. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 1.2

Prepare confirmation requests for the selected accounts. Trace the FS balance to the trial balance and to the general ledgers (GL).

EO RO C EO C EO

1.3 Trace the beginning balance appearing in the GL to prior years working paper.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.4

Secure a schedule of ReceivableDisallowances/Charges which should contain the following information: Name of the agency Addres Balance of account Date reported Age of the accounts balance Referral for legal action, write off/condonation

C EO RO

1.5 Check totals of schedule and compare with GL balance. 1.6 Check the details of the schedule of ReceivableDisallowances/Charges against the SL. 1.7 Verify the correctness of postings in the SL through the General Journal (GJ) to the Journal Entry Voucher (JEV). 2.1 Review the entries in the general ledger (GL). For debits to the account Trace postings to the subsidiary ledger, JEVs, supporting notice of disallowances / charges ( ND / NC )or other supporting documents and check whether entries are based on decisions that are final and executory.

C EO C EO C EO

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

For credits to the account: Trace postings to the JEV, Report of Collections and Deposits (RCD) and Cash Receipt Journal (CRJ)/General Journal (GJ) 2.2 Investigate credit balances in the account, if any. C EO

EO

2.3 Examine selected debits and credits after balance sheet date to determine whether there were unrecorded receivables and collections for the year under audit but which were erroneously taken up in the subsequent year. 2.4 Examine individual source documents such as JEVs, DVs, MOA and other documents for: 3.1 Regularity Authorization and approval Validity Accuracy

C EO VM

C EO VR

Perform analytical procedures, like: a. Accounts Receivable turnover. Compute the turnover of Receivable-Disallowances/Charges with that of the preceding year and indicating averages. Obtain explanation from agency for unusually low turnover rate. b. Ratio of accounts written off to balance of ReceivableDisallowances/Charges. C EO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

Compare with prior year and obtain managements explanation for unusually high ratio. 4.1 Review the aging schedule of the account. 4.2 Analyze the ratio of dormant/non-moving accounts to total receivables. 4.3 Select samples of long outstanding or overdue accounts. Review the subsidiary details and inquire from management what actions have been taken on dormant and non-moving accounts. C EO C VM EO VM C EO RO VM C EO RO VM EO RO VM VR PD

4.4

4.5 Make an analysis on the probability of collection and evaluate the impact on the financial position of the agency. 4.6 Validate action by management to initiate collection/liquidation particularly dormant/non-moving accounts. 5.1 Check whether the account is presented in the balance sheet as current assets. See that it conforms to the provisions of the NGAS. 5.2 Check whether the inclusion in the balance of dormant/non-moving accounts and the doubtful collectibility thereof are adequately disclosed. 5.3 Take note of deficiencies, if any. Prepare and issue AOM.

VM PD

PREPARED BY :

REVIEWED BY :

APPROVED BY : Date

Date Date B.3.2 Audit Programs for Different Investment Accounts 1. Investment in Treasury Bills NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INVESTMENT IN TREASURY BILLS ( Account Code 191 )

Account Description : Treasury bills (T-bills) are short-term indebtedness issued by the National Government through the Bureau of Treasury (BTr). Interest rate of T-bills is fixed at the time of placements up to the time of maturity. However, the interest rates vary as the T-bills are offered to the investors. Although the interest rate offered is relatively lower than other commercial papers, T-bills are almost risk-free because they are backed up by the Philippine Government. The term of T-bills ranges from 30 days to 365 days. T-bills with less are classified in the balance sheet as cash equivalents. Audit Objectives : (based on scripless transactions): 1. To ascertain the existence of the reported investment in Treasury bills as of balance sheet date. 2. To ascertain that all transactions regarding investments in Treasury bills during the period are completely and properly recorded in the books. 3. To determine whether T-bills placement and termination are in accordance with the existing laws, rules and regulations. 4. To ascertain whether the account is properly presented and adequate disclosure in the financial statements is made. terms of 90 days or

Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Simultaneous with the cash count and/or as the need arises, obtain Schedule of Outstanding Treasury bills (T-bills) held by the agency as of balance sheet date. a. Prove mathematical accuracy of the schedule. b. Compare the balance appearing in the schedule to the subsidiary ledger (SL), general ledger (GL) and the reported balance in the balance sheet. 1.2 Prepare confirmation letter addressed to the Bureau of Treasury (BTr) (Fig TB-1). a. Have the confirmation signed by the authorized agency official. b. Check whether the confirmation letter is mailed with return address directly to the Auditor. c. Compare the result of the confirmation with the schedule provided by the agency. d. In case of any discrepancy, recommend adjusting entry or prepare an Audit Observation Memorandum (AOM) whichever is more applicable. C EO C EO

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1 Obtain subsidiary ledger (SL) of treasury bills (T-bills) as of balance sheet date. a. Prove mathematical accuracy of the SL. b. Compare the balance appearing in the SL with the GL and the reported balance in the balance sheet.

C EO

2.2 In the absence of management document detailing the movements (increase and decrease) of the account, prepare working paper (INV-TB1.1) substantiating the placements and termination/maturities of T-bills for the period. 2.3 On a test basis, vouch the placements (debits) and terminations/maturities (credits) of T-bills using the sampling method approved by COA. a. Trace placements and terminations / maturities to the journal vouchers (JVs) and GL. b. Check mathematical accuracy. c. Check whether placements are debited and terminations /maturities are credited to the corresponding bank account of the agency.

C EO

EO VR RO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.4 Verify whether there are transactions for the current year (placements or terminations/maturities) which are recorded after balance sheet date. a. Bank debits after balance sheet date that pertained to T-bills placements as of balance sheet date. b. Bank debits after balance sheet date that pertained to T-bills terminated on or before balance sheet date.

EO VM

3.1

Review the agencys legal basis in the Tbills placement such as: a. Charter, board resolutions, company policies and other relevant documents in the case of a corporation; b. Local Government Code, Sanggunian or City Resolution for LGUs; and c. DBM and/or other duly authorized officials approval for national government

VR

3.2

Evaluate whether the T - bills placement is in line with the operations of the agency or necessary for the attainment of the agencys objectives. Obtain the related disbursement vouchers, bank debit/credit memos (for acquisitions/purchases) and ORs or bank debit/credit memos (for sale/maturities) together with the supporting documents.

VR

3.3

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.4 Check the completeness and authenticity of the supporting documents. For t-bills placements, check whether the following documents are attached to the voucher/bank credit memo: a. Disbursement voucher/bank credit memo b. Authority in T-bills placements (board, sanggunian or city resolution) c. Certification of funds availability d. Document to support viability of the investment 3.5 Verify whether the acquisition of investment is within the approved budget of the agency. In the case of a corporation, the amount of T-bills placement is within the corporations investment policy. In case of T-bills pre-termination, determine if there is approval from authorized agency official.

C EO VR

VR

3.6

VR

4.1 Obtain certification from management that all T-bills in the name of the agency is free from liens and other restrictions. 4.2 Obtain relevant board resolutions and ascertain therein if there were board resolutions attaching T-bills to loans or any other resolutions affecting the nature of the T-bills investments. Check whether the schedule of investment in T-bills includes only those that will mature in 90 days or more, otherwise they are classified as cash equivalents.

VR RO VR RO

4.3

EO VM PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

4.4 Verify any restriction relative thereto and properly disclosed in the notes to financial statements. 4.4 Check whether treasury bills are properly presented in the balance sheet as current asset. PREPARED BY : REVIEWED BY :

RO

PD

APPROVED BY : Date

Date Date 2. Time Deposits (Without Provisions on Pre-termination)

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ TIME DEPOSITS Without Provision on Pre-termination

Account Description : These are bank deposits with fixed rate of interest from the time of placement to the time of maturity. These time deposits have term of 90 days or more otherwise said deposits are to be classified as one of the cash equivalent. Agencies usually opted for time deposits because they provide for higher rate of interest than other time deposit that can be pre-terminated. Audit Objectives: 1. To ascertain whether the time deposit account as of balance sheet date is supported by time deposit certificates or other documents in the name and custody or disposition of the agency. 2. To ascertain whether all transactions on time deposits during the period are completely and properly recorded in the books. 3. To determine whether time deposit placement and termination are in accordance with existing laws, rules and regulations.

4. To ascertain whether time deposits are properly valued as of balance sheet date. 5. To ascertain whether there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Simultaneous with the cash count and/or as the need arises, conduct inventory of certificates or any other documents attesting to the existence of time deposits. a. Use count sheet (Fig B-1). b. Check whether the certificates are in the name of the agency. c. Upon completion of the count, request the custodian to sign the acknowledgment in the security count sheet. 1.2 Obtain schedule of time deposit as of date of count having among others the following information: a. b. c. d. e. f. Name of issuing bank Serial number Date of issue Interest rate Term Amount

C EO VR RO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3

Prepare confirmation request addressed to the depository bank/s (Fig. B-2). a. Have the confirmation letter signed by the authorized agency official. b. Confirmation letter should be mailed by and with return address directly to the Auditor.

EO RO

1.4

Compare the inventory count sheet and the schedule of time deposit with the result of confirmation.

C EO RO C EO RO

1.5 For certificate included in the schedule but were not counted: a . Inquire about the custodian/s of such certificates b. If brokers, banks and other outside custodians are entrusted with the certificates, prepare confirmation letter (Fig. B-3) c. Have the confirmation letter signed by the authorized agency official. d. Check whether the confirmation letter is mailed by and return reply directly addressed to the Auditor 1.6 Take note of certificates excluded in the schedule of time deposits but were included in the count. a. Obtain satisfactory explanation why such certificates are excluded from the schedule, note down in the working paper.

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1 For analytical review, perform the following: a. Compare current year time deposit balance with the balance of the previous year. b. If the analytical review does not provide audit conclusion, proceed to substantive test of transactions. 2.2 Check beginning balance of time deposits to previous working paper or balance sheet.

C EO

C EO C EO RO

2.3 In the absence of management document detailing the movements (increase and decrease) of the account, prepare working paper

(INV-TD1.1) substantiating the placements and terminations/ maturities of time deposits for the period. 2.4 For numerous transactions, vouch the placements (debits) and terminations/maturities (credits) of time deposits on a test basis using the sampling method approved by COA. a. b. Check mathematical accuracy. Check whether placements are debited and terminations/ maturities are credited to the corresponding bank account of the agency. c. Trace placements and terminations/maturities to the journal vouchers (JVs) and GL. E EO RO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.5

Check whether transactions for the current year (placements or terminations / maturities) which were recorded in subsequent period are properly adjusted. a. Review time deposit placements five to ten days before and after balance sheet date. b. Trace credits in the bank statements and other supporting documents such as bank advices after balance sheet date to determine the date of terminations and/or maturities.

C EO VM

2.6 Trace ending balance to the GL, trial balance and balance sheet.

C EO

3.1 Review the agencys legal basis in time deposit placements such as: a. Charter, board resolutions, company policies and other relevant documents in the case of a corporation; b. Local Government Code, Sanggunian or City Resolution for LGUs; and/or other duly authorized officials approval for national government. 3.2 Evaluate whether the time deposit placement is in line with the operations of the agency or necessary for the attainment of the agencys objectives.

VR

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.3

On a test basis, obtain the related disbursement vouchers, bank debit/credit memos (for acquisitions/purchases) and ORs or bank debit/credit memos (for sale/maturities) together with the supporting documents.

C EO VR

3.4 Check the completeness and authenticity of the supporting documents. For time deposit placements, ascertain that the following documents are attached to the voucher/bank credit memo: a. Disbursement voucher/bank credit memo b. Authority in T-bills placements (board, sanggunian or city council resolution)

C EO VR

c.

Certification of funds availability d. Document to support viability of the investment 3.5 Verify whether the placement of time deposits is within the approved budget of the agency. In the case of a corporation, the amount of time deposit placement is within the corporations investment policy. VR

3.6 In case of pre-termination of time deposit, verify whether there is approval from authorized agency official.

EO VR RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

4.1

In case there are time deposits in foreign currencies, determine proper valuation in local currency rate. a. Obtain BSP exchange rate as of balance sheet date. b. Multiply the balance of time deposit in foreign currency to the prevailing BSP exchange rate. c. Compare the result to the balance appearing in the balance sheet.

C EO VR VM

5.1 Obtain certification from management that restrictions are made on time deposit investment or pledges as collateral in long-term loans. 5.2 Obtain and examine relevant board resolutions and ascertain therein if there were board resolutions attaching

RO

VR RO

time deposit to loans or any other resolutions affecting the nature of the time deposit. 5.3 Verify whether there are any restrictions and other factor affecting the nature of time deposits and proper disclosure is made in the notes to financial statements. 5.4 Check whether time deposit is properly presented in the balance sheet as current asset. PD

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

3. Investment in Stocks NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INVESTMENT IN STOCKS ( Account Code 192 ) Account Description : Stocks are shares that represent ownership of an incorporated company evidenced by stock certificates. The certificate indicates the name of the investor, certificate number, number of shares owned, the par value per share and the total authorized capital stock. Stock investments are classified as equity investments. Stocks are securities that can be acquired in the exchange market. The investing public can sell and purchase stocks listed in the Philippine Stock Exchange (PSE).

Audit Objectives: 1. To ascertain whether certificates or other documents of ownership supporting the balance of the stock investment account in the balance sheet are in the custody or disposition of the agency.

2. To determine whether all transactions on stock investment account as of balance sheet date are completely and properly recorded in the books. 3. To determine whether acquisitions and dispositions of stocks are in accordance with existing laws, rules and regulations. 4. To ascertain whether investment in stocks account is properly valued as of balance sheet date. 5. To ascertain whether there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet.

Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Obtain

schedule

of

stock

investments from the agency with the following information: a. b. c. d. e. 1.2 1.3 Name of issuing company Certificate No. No. of shares Cost per share Amount

C EO

Prove mathematical accuracy of the schedule. On a surprise visit and simultaneous with the cash count, conduct inventory of the stock certificates

C C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f in the

1.4

Count stock certificates presence of the custodian.

a. Use security count sheet ( Fig. C1) b. Check whether the certificates are in the name of the agency. c. If the inventory of stock certificates would take more than one day, see to it that certificates which are not yet counted are placed in sealed envelopes.

C EO RO

d. Upon completion of the count, request the custodian to sign the acknowledgement in the security count sheet.

1.5

For stock certificates included in the schedule but not included in the count: a. Inquire about the custodian/s of such stock certificates.

C EO RO

a. If brokers, banks and other custodians are entrusted with stock certificates, prepare confirmation letter (Fig. C-2). b. Have the confirmation letter signed by the authorized agency official. c. Check whether the confirmation letter is directly mailed by and addressed to the Auditor.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.6

List stock certificates excluded in the schedule but included in the count. Obtain satisfactory explanation why such stock certificates are excluded from the schedule, otherwise note down in the working paper.

C EO RO

1.7

Compare agency investment count accounts.

schedule to the sheet and ledger

C EO RO C EO VM

2.1

For the analytical review, perform the following: a. Compare current year balance of stock investment with the balance of the prior year. b. Relate the changes in the current market value of the stocks to the market value of the prior year.

c.

If the analytical review does not provide sufficient audit evidence, proceed to substantive test. C EO

2.2

Check beginning balance of the stock investment to the previous year working paper or balance sheet. In the absence of management document detailing the movements ( increase and decrease) of the account, prepare working paper (INV-S1.1) substantiating the acquisitions and disposal/sales of stocks.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.3

Vouch additions (acquisitions) and deductions (disposal/sale) to supporting documents such as brokers advices and statements, official receipts, bank advice, etc. Vouch supporting documents on a test basis using the sampling method approved by COA.

C EO Va/L R

2.4 Verify whether transactions for the current year (acquisitions or disposal/sale) but recorded in subsequent period are properly adjusted. a. Review stock investment transactions one month after balance sheet date. b. Trace cash collections to official receipts and other supporting documents such as contract of sale to determine the date of sale. 2.5 Trace ending balance to the general ledger; trial balance and balance sheet. Review the agencys legal basis in the acquisition of investment in stocks. a. Charter, board resolutions, company policies and other relevant documents in the case of a corporation; b. Local Government Code, Sanggunian or City Resolution for LGUs; and c. DBM and/or other duly authorized officials approval for national government.

C EO VM

C EO

3.1

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.2 Evaluate whether the acquisition of stock investment is in line with the operations of the agency or necessary for the attainment of the agencys objectives. 3.3 Obtain the related disbursement vouchers, bank debit/credit memos (for acquisitions/purchases) and ORs or bank debit/credit memos (for sale/maturities) together with the supporting documents. 3.4 Check the completeness and authenticity of the supporting documents. For stock acquisition, ascertain that the following documents are attached to the voucher/bank credit memo: a. Disbursement voucher/bank credit memo

VR

C EO VR

C EO VR

b. Authority to purchase (board, sanggunian or city resolution) c. Certification of funds availability d. Document to support viability of the investment 3.5 Verify whether the acquisition of investment is within the approved budget of the agency. In the case of a corporation, the stock acquisition is within the corporations investment policy. VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.6 In case of stock disposition, check whether there is approval from authorized agency official. 4.1 On a test basis, vouch supporting documents affecting the investment account using the sampling method approved by COA. a. Check whether the initial cost of the investment includes not only the purchase price but also all the incidental cost such as brokers fees, insurance, etc. b. Verify whether the cost not the selling price of the investment is credited in the books in case of sales.

VR

EO VR

4.2

At year-end, determine the aggregate market value of all the stock investments as published by the Philippine Stock Exchange (PSE). Compare acquisition cost to the prevailing market price of the investment Compare disposition prices to the prevailing market price. Take note of the difference, if any. Recognize the difference between the book value and the market values of the stocks as valuation allowance.

C EOV VM C EO VM C EO VM C EO VM

4.2 4.3

4.5

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

5.1 Obtain certification from management if there are restrictions on the stock investments or they are pledged as collateral in long-term loans. 5.2 Obtain and examine relevant board resolutions and ascertain therein if there were board resolutions attaching stocks to loans or any other resolutions affecting the nature of the stock investments.

C EO RO

VR RO

. 5.3 Verify whether the restrictions and other factor affecting the nature of stock investments are adequately disclosed in the notes to financial statements. 5.4 Check whether investment in stocks are properly presented in the balance sheet as non-current asset. Prepare and issue AOM on noted deficiencies.

PD

PD

5.5

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

4. Investment in Bonds

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INVESTMENT IN STOCKS ( Account Code 192 ) Account Description : Bonds are certificate of indebtedness, usually long-term issued by a business entity promising to redeem a specified sum of money at a fixed future date. Bonds provide maximum safety to lenders while offering a steady income in the form of interest. Bonds acquired above carrying value is said to be acquired at a premium while bonds acquired below its carrying value is said to be acquired at a discount. Both the bond premium and discount are amortized to present the bond investments in the proper valuation at balance sheet date. Audit Objectives:

1.To ascertain whether the balance of bond investment account as of balance sheet date is supported by certificates or other documents of ownership in the custody or disposition of the agency. 2.To determine whether all transactions on bond investment account as of balance sheet date are completely and properly recorded in the books. 3. To determine whether bond acquisitions and dispositions are in accordance with existing laws, rules and regulations. 4. To ascertain whether investment in bonds is properly valued as of balance sheet date. 5. To ascertain whether the account is properly presented and adequate disclosures pertaining to investments in bonds are made in the financial statements.

Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Obtain schedule of bond investments from the agency. Prove mathematical accuracy. 1.2 On a surprise visit, simultaneous with the cash count, conduct inventory of the bond certificates.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Count bond certificates in the presence of the custodian. a. Use security count sheet. b. If the inventory of bond certificates would take more than one day, see to it that certificates which are not yet counted are placed in sealed envelopes. c. Upon completion of the count, request the custodian to acknowledge the security count sheet by affixing therein his/her signature. 1.4 For bond certificates included in the schedule but not included in the count: a. Inquire about the custodian/s of such bond certificates. b. If brokers, banks and other custodians are entrusted with bond certificates, prepare confirmation letter. c. Have the confirmation letter signed by the authorized agency official.

C EO

d. Check whether the confirmation letter is mailed by and directly addressed to the Auditor. 1.5 List bond certificates excluded in the schedule but included in the count. Obtain satisfactory explanation why such bond certificates are excluded from the schedule. Note down in the working paper. 1.6 Compare agency schedule to the investment count sheet ledger cards.

C EO RO

C EO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1

For the analytical review, perform the following: a. Compare current year balance of bond investment with the balance of the prior year. b. If the analytical review does not provide sufficient audit evidence, proceed to substantive test. C EO C EO C EO

2.2

Check beginning balance of the bond investment to the previous year working paper or balance sheet.

2.3 In the absence of management document detailing the movements (increase and decrease) of the account, prepare working paper substantiating the purchase and redemptions/sale of bonds for the period. 2.4 Vouch additions (acquisitions) and deductions (disposal/redemption) to supporting documents such as brokers advices and statements, official receipts, bank advice, etc. 2.5 If transactions affecting bond investment account are numerous, vouch supporting documents on a test basis using the sampling plan approved by COA.

C EO

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.6 Check whether transactions for the current year (acquisitions or disposal/ redemption) are recorded in subsequent period. Make the necessary adjustment. a. Review bond investment transactions one month after balance sheet date. b. Vouch cash disbursements after balance sheet date to the supporting brokers advices to determine the actual date of acquisitions or purchases. c. Trace cash collections to official receipts and other supporting documents such as contract of sale to determine the date of sale.

2.7 3.1

Trace ending balance to the general ledger, trial balance and balance sheet. Review the agencys legal basis in the acquisition of investment in bonds a. Charter, board resolutions, company policies and other relevant documents in the case of a corporation;

C EO RO VM C EO VR

b. Local Government Code, Sanggunian or City Resolution for LGUs; and c. DBM and/or other duly authorized officials approval for national government 3.2 Evaluate whether the acquisition of bond investment is in line with the operations of the agency or necessary for the attainment of the agencys objectives. VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.3 Obtain the related disbursement vouchers, bank debit/credit memos (for acquisitions/purchases) and ORs or bank debit/credit memos (for sale/maturities) together with the supporting documents. 3.4 Check the completeness and authenticity of the supporting documents. For bond acquisition, check whether the following documents are attached to the voucher/bank credit memo:

C EO VR

C EO VR

a. Disbursement voucher/bank credit


memo b. Authority to purchase (board, sanggunian or city resolution) c. Certification of funds availability d. Document to support viability of the investment

3.5

Verify whether the acquisition of investment is within the approved budget of the agency. In the case of a corporation, the bond acquisition is within the corporations investment policy.

VR

3.6 In case of bond disposition, determine if there is approval from authorized agency official.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

4.1

If transactions are numerous, on a test basis, vouch supporting documents affecting the bond investment account using the sampling method approved by COA. a. Check whether the initial cost of the investment includes not only the purchase price but also the entire incidental cost such as brokers fees, insurance, etc. b. Check whether the cost not the selling price of the investments is credited in the books in case of sales. c. Check whether the bond discount or premium is properly closed upon bond sales or maturities

C EO VM C EO VM C EO VM

4.2

Compare disposition prices to the prevailing market price and investigate any difference.

4.3 At year-end, determine whether bond discount and amortization are properly amortized.

5.1

Obtain certification from management if there are restrictions on the bond investments or they are pledged as collateral in long-term loans.

RO

5.2 Obtain relevant board resolutions attaching bonds to loans or any other resolutions affecting the nature of the bond investments. 5.3 Verify whether any restrictions and other factor affecting the nature of bond investments are properly disclosed in the notes to the financial statements

VR RO

RO PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

5.4 Check whether investment in bonds are properly presented in the balance sheet as non-current asset. 5.5 Prepare and issue AOM on the noted deficiencies.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

5. Investment in Joint Venture/ Investment in Subsidiary Companies Other Investments and Marketable Securities NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INVESTMENT IN JOINT VENTURE INVESTMENT IN SUBSIDIARY COMPANIES OTHER INVESTMENT AND MARKETABLE SECURITIES ( Account Code 197 )

Account Description: Joint venture is a contractual agreement whereby two or more parties undertake an economic activity, which is subject to joint control. A venturer is a party and has a joint control over the joint venture while an investor to a joint venture has no joint control over the joint venture. The venturers having joint control over the business has the power to govern the financial and operating policies so as to benefit from it. A subsidiary company is a business entity whose ownership is controlled by another company called the parent company. The subsidiary may not be totally owned by the parent company but due to the investment of the parent to the subsidiary, the operations and financial policies of the latter is controlled by the former. Audit Objectives: 1. To ascertain the existence of investment in joint venture/subsidiary and that the agency is either an investee or investor in said joint venture. 2. To determine whether the agencys placement in joint venture/subsidiary is in accordance with the existing laws, rules and regulations. 3. To ascertain the investment in joint venture/ subsidiary are completely and properly valued under the equity method as of balance sheet date.

4. To ascertain whether there are adequate disclosures in the notes to financial statements and proper presentation in the balance sheet. Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) , Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Obtain the covering Memorandum of Agreement (MOA).

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2 Examine the contents of MOA such as: a. Authenticity (signatories, notarization , authorization ) b. Parties to the joint venture c. Purpose of the joint venture d. Sharing of the investees and investors as to profits, assets, expenses and control in operations and financial policies e. Extent of ownership of the agency 2.1 Review the agencys legal basis in the joint venture placements: a. Charter, board resolutions, agency policies and other relevant documents in the case of a corporation; b. Local Government Code, Sanggunian or City Resolution for LGUs; and c. DBM approval for national government and/or authorization from concerned government officials 2.2 Evaluate whether the investment in joint venture is in line with the operations of the agency or necessary for the attainment of the agencys objectives. 2.3 Obtain the related disbursement vouchers, bank debit/credit memos (for acquisitions/purchases) and ORs

EO VR RO

VR

VR

C EO

or bank debit/credit memos sale/maturities) together with supporting documents.

(for the

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.4 Check the completeness and authenticity of the supporting documents. Check whether the following documents are attached to the voucher/bank credit memo: a. Disbursement voucher/bank credit memo b. Authority to purchase (board, sanggunian or city resolution) c. Certification of funds availability d. Document to support viability of the investment 2.5 Verify whether the investment is within the approved budget of the agency. In the case of a corporation, check whether the investment is within the corporations investment policy. 3.1 Verify the percentage of ownership of the agency in the subsidiary and/or joint venture.

C EO VR

VR

C EO VR C EO

3.2 Obtain and examine the audited financial statement of the subsidiary and/or joint venture for the related year. 3.3 Compute for the share of the agency in the income or loss of the subsidiary and/ or joint venture. a. Multiply the percentage of ownership to the net income or loss of the subsidiary and/ or joint

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

venture. b. Recognize the income as addition to the investment in subsidiary and/or joint venture. c. Take up the loss as a deduction to the investment in subsidiary and/or joint venture. 4.1 Obtain certification from management if there are restrictions on the investment in joint venture and subsidiaries or they are pledged as collateral in long-term loans. C EO VM VR

4.2 Obtain and examine relevant board resolutions and ascertain therein if there were board resolutions attaching the investments to loans or any other resolutions or policies affecting the nature of the bond investments. 4.3 Verify whether there are restrictions and other factors affecting the nature of investments and check whether these are properly disclosed in the notes financial statements. 4.4 Check whether investment in joint venture/subsidiary are properly presented in the balance sheet as non-current asset. Prepare and issue AOM on noted deficiencies. Organize working papers including indexing and cross-referencing.

VR RO

PD

4.5 4.6

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date Date B.4.2 Audit Programs for different kind of Inventories NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SUPPLIES INVENTORY ( Account Code _____ ) Account Description: 1. 2.

Date

Office Supplies Inventory (155) - This account is used to record the cost of office supplies purchased/received for use in government office operations. Accountable Forms Inventory (156) - This account is used to record the cost or appropriate value of accountable forms acquired/received for use in the course of government operations and/or sale.

3. Drugs and Medicines Inventory (159) Medical, Dental and Laboratory Supplies Inventory (160)- This account is used to record the cost of drugs and medicines, medical, dental and laboratory supplies purchased/received for use in government operations/projects. It includes drugs and medicines purchased for consumption of hospitals/sanitary/clinic/center and other items used in research activities. 4. Food Supplies Inventory (158) Other Supplies Inventory (165) This account is used to record cost of non-perishable foods and non-food supplies inventory in hospitals (Dietary Units and penitentiary. It also includes those items purchased for distribution to people affected by calamities/disasters/areas in conflict. 5. Gasoline. Oil and Lubricants Inventory (161) This account is used to record the cost of gasoline, oil and lubricants purchased for stock, for issuance/consumption in government operations. Audit Objectives: 1. To determine whether all acquisitions and issuances of inventories are completely recorded and were made in accordance with the existing laws, rules and regulations. 2. To determine the existence and ownership of inventories. 3. To determine whether inventory is valued in accordance with SFAS No. 4 as amended series of 2000 and/or Section 44 of NGAS, Volume I. 4. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the notes to financial statements.

Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

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1.1. Trace beginning balance to prior years audit working papers. 1.2 Trace account balance from the Trial balance (TB) to General Ledger (GL) to Subsidiary Ledger (SL).

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.3

Trace debit postings from GL to Check Disbursement Journal (CkDJ) to Journal Entry Voucher (JEV) and then select sample transactions to be vouched for regularity. (Use materiality as basis in obtaining samples). For Purchases: a. Check if sample vouchers are properly approved, certified and supported by the following documents: a.1 a.2. a.3. a.4. a.5. a.6. Supplies Availability Inquiry (SAI); Obligation Slip (OS) / Budget Utilization Slip (BUS); Approved Purchase Requisition (PR); Approved Purchase Order (PO); Delivery Receipts (DR); Inspection and Acceptance Report (IAR);

C EO VR

C EO VR

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

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b. Depending on the method of procurement check the following documents: b.1. Public Bidding Evidence of publication of the invitation to apply for eligibility to bid; such as copies of newspaper clippings and certification of the Head of the Bids and Awards Committee (BAC) Secretariat that it is posted in the website of the procuring entity and in conspicuous premises of the procuring entity ;and Copy of the post qualification report of the BAC; Quotations of the participating bidders; Abstract of quotations duly signed by the BAC; and Notice of Award EO VR

b.2 Alternative Methods Check approval of procuring entity of alternative method procurement; the the of EO VR

Check whether the conditions and requirements prescribed in the Implementing Rules and Regulations (IRR) of

ASSERTIONFS

AUDIT PROCEDURES

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RA 9184 for the use of alternative method of procurement are met. Limited Source Bidding; Direct Contracting; Repeat Order; Shopping; and Negotiated Procurement. 1.3. For Confiscated Goods/Forfeited Items: a. Obtain Monthly Schedule of Confiscated Goods and/or Forfeited Items from management and check whether they are supported by the following documents: 1.4 Order of confiscation from the Regional Executive Director; Order of forfeiture coming from the Court; Other related documents EO VR C EO VR

Obtain Agencys Annual Procurement Program (APP) and test check whether purchases are within the procurement program.

1.5 Trace credit postings in the GL to the General Journal (GJ) to the JEV to Report of Supplies and Materials Issued (RSMI); 1.6 Examine the validity of issuances and determine whether the Report of Supplies and Materials Issuances

C EO

EO VR VM

ASSERTIONFS

AUDIT PROCEDURES

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(RSMI) is supported by the following documents: For Supplies: a. Approved Supplies Inquiry (SAI); and b. Availability

Approved and properly accomplished Requisition and Issue Slip (RIS).

c. Memorandum of Agreement for transfer without cost to other government agency and/or donation to private entity; and d. Other related documents necessary to determine that existing law, rules and regulations are followed. 1.7 Check totals of debit and credit entries in the GL. Establish the ending balance. 1.8 Compare GL account balance with the SL balance. Prepare Audit Working Papers. Obtain and review detailed plan and procedures of inventory taking. Obtain cut-off information, including the last receipt and issuances on the date of physical inventory. Observe the physical inventory taking, paying particular attention to the use and control of inventory tag or conduct alternative procedures. C EO C EO EO VR EO VM EO VR

2.1 2.2

2.3

ASSERTIONFS

AUDIT PROCEDURES

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2.4 Obtain copy of the inventory report and compare balance per count with the balance per Stock Card (SC). 2.5 Compare balance per SC with the balance per Supply Ledger Card (SLC), take note of discrepancies. 2.6 Compare balance per inventory report with the GL balance, Take note of any discrepancy.

C EO C EO C EO C EOV VM C EO RO C EO VM C EO C EO VM C EO VM C EO VM

2.7 Examine a sample of receiving documents for a few days before and after year end for recording of inventory purchases in the proper period. 2.8 Verify whether inventory held on consignment for others is not included in the inventory. Prepare audit working papers. 3.1 Verify costing method of inventory. 3.2 Re-compute SLC balances on a test basis. 3.3 Check whether cost includes appropriate items such as tax, insurance, freight and others. 3.4 Check whether cash, trade discounts, allowances and special deals and others are considered. 3.5 Obtain and review list of obsolete inventory and determine whether they are valued at their net realizable value. Prepare Audit Working Papers.

ASSERTIONFS

AUDIT PROCEDURES

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4.1 Verify whether the following are disclosed in the notes to financial statements : a. Accounting policies on inventories, including the cost method used b. The carrying amount of inventories carried at net realizable value c. The carrying amount of inventories pledged as security for liabilities 4.3 Prepare and issue Audit Observation Memorandum (AOM).

PD

4.4 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

6. Livestock Inventory

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ LIVESTOCK INVENTORY ( Account Code 169 ) Acount Description: This account is used to record the cost or appropriate value of livestock acquired or purchased to be used in the dispersal program/project of the government. It is also used to record livestock produced and offered for sale up to reaching marketable age. Audit Objectives: 1. To determine whether all inventories are completely recorded and were made in accordance with laws, rules and regulations. 2. To determine the existence and ownership of inventories. 3. To determine whether inventory is valued in accordance with SFAS No. 4 as amended series of 2000 and/or Section 44 of NGAS, Volume I. 4. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the notes to financial statements. Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

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1.1 Trace beginning balance to prior years audit working papers. 1.2 Trace balance of the account from Trial Balance to the General Ledger to Subsidiary Ledger. Compare the balances and take note of discrepancy, if any.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.3 Trace debit postings to the account from Check Disbursement Journal (CkDJ) and General Journal to Journal Entry Voucher, then to Subsidiary Ledger, and finally, to source documents. 1.4 Trace credit postings to the account in the General Journal and Cash Receipts Journal (CRJ), to Journal Entry Voucher, to Subsidiary Ledger, to source documents. 1.5 Compare General Ledger balance with Subsidiary Ledger balances. Take note of any discrepancy. 1.6 Secure a copy of the Agencys Manual on Livestock. Take particular attention on the breeding cycle of the animals i.e. gestating period, lactating period and weaning period. 1.7 For acquisitions, following documents examine the

C EO VR

C EO VR

C EO VR

Approved Disbursement Voucher Approved Purchase Order Approved Purchase Request Inspection and Acceptance Receipt Mode of procurement Other related documents and determine the following: breed of the animals purchased age ear tag for imported breeds large cattle certificates cost per animal approval and authorization and availability of funds

C EO VR RO

ASSERTIONFS

AUDIT PROCEDURES

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other information necessary to identify the animals purchased. Take note of exceptions, if any. 1.8 Get sample of female Livestock Ledger Cards and analyze entries with respect to its breeding cycle. 1.9 Follow-through entries in the ledger with respect to birth of offspring. Take particular attention on animals without records of pregnancy. Inquire reason from management. 1.10 With the information obtained in procedures 2.3 and 2.4 prepare schedule of offspring that have not been recorded in the books. the C EO RO VM C EO VR VM C EO

1.11 For dispositions, examine following documents:

Memorandum of Agreement with Local Government Units (for dispersal projects) Name of beneficiary (for dispersal projects) List of Dead Animals (death of animals) Certificates of death of animals Official Receipt (sale of the animals) Report of Collection and Deposit (RCD) Other related documents

Verify whether dispositions are in accordance with existing laws, rules and regulations.

ASSERTIONFS

AUDIT PROCEDURES

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2.1

Obtain and review the Inventory Plan as to man power involved, timetable, reporting, cut-off and reconciliation with accounting records.

C EO VR VM EO VM

2.2 Examine sample receiving documents for a few days before and after year-end for recording of inventory purchases in the proper period. 2.3 Observe the physical inventory taking with particular attention on the use of control tags (ear tags, etc.). Conduct alternative procedures, if necessary. 2.4 Obtain copy of the Physical Count of Inventories and compare balance per count with the balance of the Stock Cards, then to Supplies Ledger Cards. Take note of any discrepancy.

C EO VR C EO

2.5 Verify whether inventory held in trust for others are not included in the inventory. 3.1 Review the cost system, bases and methods of pricing the inventory for propriety and consistency of application. Check agency standards regarding appropriate time when an animal should be assigned a control tag and a separate Livestock Ledger Card with the corresponding cost, especially on birth of offspring.

3.2

C EO RO VM C EO VR VM VR

4.1 Check whether the Inventory account is classified under current assets and presented after Accounts Receivable.

PD

ASSERTIONFS

AUDIT PROCEDURES

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4.2 Check whether there is adequate disclosure regarding the account in the notes to financial statements. 4.3 Prepare Audit Observation Memorandum for noted deficiencies. 4.3 Organize working papers including indexing and cross-referencing.

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

7. Agricultural Supplies Inventory NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ AGRICULTURAL SUPPLIES INVENTORY ( Account Code 162 ) Account Description: This account is used to record the cost or appropriate value of agricultural supplies purchased or acquired thru donation for use in the implementation of government programs. Audit Objectives: 1. To determine whether all inventories are completely recorded and were made in accordance with laws, rules and regulations. 2. To determine the existence and ownership of inventories. 3. To determine whether inventory is valued in accordance with SFAS No. 4 as amended series of 2000 and/or Section 44 of NGAS Volume 1. 4. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the Notes to FS. Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

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1.1 Trace beginning balance to prior years audit working papers. 1.2 Trace balance of the account from Trial Balance, to the General Ledger to the Subsidiary Ledgers. Compare the balances and take note of discrepancy, if any.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.3 Trace debit postings to the account from the Check Disbursement Journal (CkDJ) and General Journal (GJ) to Journal Entry Voucher, to Subsidiary Ledger to source documents. 1.4 Trace credit postings to the account through the General Journal, to the Journal Entry Voucher, to Subsidiary Ledger to source documents. 1.5 Compare General Ledger balance with Subsidiary Ledger balances. Take note of any discrepancy. 1.6 Obtain a copy of the Annual Procurement Program. And determine whether the purchases are within the procurement program. 2.1 For acquisitions, examine the following document for validity, approvals, documentation and correctness of computations and availability of funds: Approved Disbursement Voucher (DV) Approved Purchase Order Approved Purchase Request Supply Availability Inquiry (SAI) Inspection and Acceptance Receipt (IAR) Other related documents

C EO VR

C EO

VR

C EO VR

2.2 Check on the mode of procurement used and determine whether all the required procedures and requirements are complied with:

EO VR

ASSERTIONFS

AUDIT PROCEDURES

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2.3

public bidding limited source bidding shopping direct contracting (single source procurement) repeat order purchase from direct manufacturer purchase from exclusive distributor personal canvass C EO VR

For dispositions, verify the validity of issuances/dispositions and determine whether the Report of Supplies and Materials Issued (RSMI) is supported with the following documents: Inventory and Inspection Report for Unserviceable Property Memorandum of Agreement/deed of donation (for transfer without cost, donation) Official Receipts (for sale of the items) Authority from responsible officials (if for the use of the department/agency) Requisition and Issue Slip (RIS) Other related documents

3.1 Obtain and review the Inventory Plan as to manpower involved, timetable, reporting, cut-off and reconciliation with accounting records. 3.2 Verify sample receiving documents for a few days before and after year-end for recording of inventory purchases in the proper period.

VR VM

VM

ASSERTIONFS

AUDIT PROCEDURES

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3.3 Verify whether inventories held in trust are not included in the inventory. 3.4 Observe the physical inventory taking with particular attention on the use of inventory tags. (Conduct alternative procedures if necessary). 3.5 Obtain copy of the Physical Count of Inventories and compare balance per count with the balance of the Stock Cards, then to Supplies Ledger Cards. Take note of any discrepancy.

C EO VM EO VR

C EO

3.6 Verify the method adopted by the agency for costing inventory. 3.7 Recompute Subsidiary /Supplies Ledger Cards balance on a test basis and note discrepancy. 3.8 Check whether cost includes appropriate elements such as taxes, insurance, freight, testing fees, etc. 3.9 Check whether cost considers cash and trade discounts, allowances, special deals etc.

VM C EO C EO VM C EO VM C EO VM

3.10 Obtain list of obsolete inventory and determine whether such inventory are written down to their current market value and provide an allowance for obsolescence. Review policy on allowance for obsolescence. 4.1 Check whether the inventory account is classified under current assets and presented after the Accounts Receivable.

PD

ASSERTIONFS

AUDIT PROCEDURES

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Check whether there is adequate disclosure regarding the account in the notes to financial statements such as the following: Accounting policies in measuring inventories including the costing method used; The carrying amount of inventories carried at net realizable value; The carrying amount of inventories pledged as security for liabilities

PD

4.3 Prepare Audit Observation Memorandum, where necessary.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

8. Crops and Fruits Inventory NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CROPS and FRUITS INVENTORY ( Account Code 170 ) Account Description: This account is used to record the cost or appropriate value of fruits and crops harvested. It is also used to record the sale or other modes of disposition. Audit Objectives: 1. To determine whether all inventories are completely recorded and were made in accordance with laws, rules and regulations. 2. To determine the existence and ownership of inventories. 3. To determine whether inventory is valued in accordance with SFAS No. 4 asamended series of 2000 and/or Section 44 of NGAS, Volume I. 4. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the notes to financial statements. Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

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1.1 Trace opening balance in the summary of schedule to prior years audit working papers. 1.2 Trace balance of the account from Trial Balance to the General Ledger to Subsidiary Ledger. Compare the balances and take note of discrepancy, if any.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.3

Trace debit postings to the account from the Check Disbursement Journal (CkDJ) and General Journal to Journal Entry Voucher to Subsidiary Ledgers to source documents. Trace credit postings to the account through the General Journal and Cash Receipts Record to Journal Entry Voucher to Subsidiary Ledgers, to source documents.

C EO VR

1.4

C EO VR

1.5 Obtain a list of harvested products during the period under audit. Include information on type, quantity and cost. 1.6 For acquisitions, examine the following documents for approval, documentation, computation and fund classification: List of harvested fruits and crops Other related documents 1.7 For dispositions, examine the following documents and take note of any deficiency: Official Receipts for the sale Report of Collection and Deposit Inventory and Inspection Report for damaged/spoiled goods Requisition and Issue Slip Other related documents For the sale of products, determine the mode of disposition used. Take note of any exception.

C EO C EO VR

C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.8 Obtain the Inventory Plan as to manpower involved, timetable, reporting, cut-off and reconciliation with accounting records. 2.1 Observe inventory taking with particular attention on the use of inventory tags. Conduct alternative auditing procedure, if necessary. 2.2 Obtain copy of the Physical Count of Inventories and compare balance per count with the balance of the Stock Cards, then to Supplies Ledger Cards. Take note of any discrepancy. Check whether the harvested produce are kept or deposited in an appropriate facility provided for the purpose. Verify reports/ documents for the harvest a few days before and after the year-end for recording of inventory in the proper period.

C EO

C EO

C EO

2.3

EO

2.4

VM

2.5 Verify whether inventory held in trust for others are not included in the inventory 3.1 3.2 Determine the method adopted by the agency for costing inventory. Recompute Subsidiary Ledger Card balances on a test basis and take note of discrepancy.

C EO RO EO VR C EO C EO VR VM

3.3 Obtain list of spoiled/damaged inventory and determine whether such inventory are written down to their current marke t value. Review policy on allowance for spoilage. And check the provision for spoilage.

ASSERTIONFS

AUDIT PROCEDURES

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4.1

Check whether the inventory account is classified under current assets and presented after the Accounts Receivable.

PD

4.2 Check whether there is adequate disclosure regarding the account in the notes to financial statements. Accounting policies in measuring inventories, including the cost method used, the carrying amount of inventories carried at net realizable value. 4.3 Prepare Audit Observation Memorandum for the noted deficiencies. 4.4 Organize working papers including indexing and cross-referencing. REVIEWED BY :

VR VM PD

PREPARED BY :

APPROVED BY :

Date

Date

Date

9. Other Agricultural, Fishery and Forestry Products Inventory

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ OTHER AGRICULTURAL, FISHERY and FORESTRY PRODUCTS INVENTORY ( Account Code 176 )

Account Description: This account is used to record the cost or appropriate value of produce from fishery and other agricultural operations, which are intended for sale.

Audit Objectives: 1. To determine whether all inventories are completely recorded and were made in accordance with laws, rules and regulations. 2. To determine the existence of inventories. 3. To determine whether inventory is valued in accordance with SFAS No. 4 as amended series of 2000 and/or Section 44 of NGAS, Volume I. 4. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the notes to financial statements.

Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

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1.1 Trace opening balance in the summary of schedule to prior years working papers.

C EO

1.2 Trace balance Balance to Subsidiary balances and any. 1.3

of the account from Trial the General Ledger to Ledger. Compare the take note of discrepancy, if

C EO

Trace debit postings to the account from Check Disbursement Journal (CkDJ) and General Journal, to Journal Entry Voucher, then to Subsidiary Ledger and finally to source documents.

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

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1.4 Trace credit postings to the account in the General Journal and Cash Receipts Journal, to Journal Entry Voucher, then to Subsidiary Ledger, and finally to source documents. 1.5 Compare General Ledger balance with Subsidiary Ledger balances. Take note of any discrepancy. 1.6 Obtain a list of other agricultural, fishery and forestry products during the period under audit. Include information on type, quantity and cost. For acquisitions, examine the following documents for approval, documentation, computation and fund classification: Disbursement voucher (acquisition of other agricultural, fishery and forestry products Approved Purchase Order Approved Purchase Request Inspection and Acceptance Receipt Mode of procurement Other related documents

C EO VR

C EO C EO

1.7 For dispositions, examine the following documents for authorization, documentation, computation and mode of disposal: Official Receipts for the sale Report of Collection and Deposit Inventory and Inspection Report for damaged/spoiled goods Other related documents

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

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2.1

Obtain the Inventory Plan as to manpower involved, timetable, reporting, cut-off and reconciliation with accounting records.

C EO VR C EO

2.2 Observe inventory taking with particular attention on the use of inventory tags. Conduct alternative auditing procedure, if necessary. 2.3 Obtain copy of the Physical Count of Inventories and compare balance per count with the balance of the Stock Cards, then to Supplies Ledger Cards. Take note of any discrepancy. 2.4 Examine report for the harvest and other related documents for a few days before and after the year end for recording of inventory in the proper period.

C EO

C EO VM

2.5 Verify whether inventory held in trust for others are not included in the inventory. 2.6 Check whether the harvested produce are kept or deposited in an appropriate facility provided for the purpose. 3.1 Determine the costing method adopted by the agency. 3.2 Re-compute Subsidiary Ledger Card balances on a test basis and take note of any discrepancy.

C EO VM EO

VR C EO C EO VR VM

3.3 Obtain list of spoiled/damaged inventory and determine whether such inventory are written down to their current market value. Review policy on allowance for spoilage. And check the provision for spoilage.

ASSERTIONFS

AUDIT PROCEDURES

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4.1

Check whether the inventory account is classified under current assets and presented after the Accounts Receivable.

PD

4.2 Check whether there is adequate disclosure regarding the account in the notes to financial statements : accounting policies in measuring inventories, including the costing method used; the carrying amount of inventories carried at net realizable value

PD

4.3 Prepare Audit Observation Memorandum, if necessary. 4.4 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

10. Confiscated Goods Inventory NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CONFISCATED GOODS INVENTORY ( Account Code 166 ) Account Description: This account is used to record the cost or appropriate value of confiscated goods and properties which are decided in favor of the government. Audit Objectives: 1. To determine whether all inventories are completely recorded and were made in accordance with laws, rules and regulations. 2. To determine the existence of inventories. 3. To determine whether inventory is valued in accordance with SFAS No. 4 as amended series of 2000 and/or Section 44 of NGAS, Volume I. 4. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the notes to financial statements . Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

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1.1

Trace opening balance in the summary schedule to prior years audit working papers.

C EO C EO

1.2 Trace balance of the account from Trial Balance to the General Ledger to Subsidiary Ledgers. Compare the balances and take note of any discrepancy. 1.3 Trace credit postings to the account from the General Journal, to the Journal Entry Voucher, to Subsidiary Ledgers to source documents. 1.4 Obtain a monthly Schedule of Confiscated and/or Forfeited Items from management. Verify whether all confiscated and/or forfeited goods during the period are covered with appropriate orders from authorized bodies. 1.5 For acquisitions, examine the following documents for validity, approvals / authorization, documentation and compliance with rules and regulations: Order of Confiscation emanating from the Regional Executive Director Order of Forfeiture coming from the court Other related documents

C EO VR C EO VR

EO VR RO

ASSERTIONFS

AUDIT PROCEDURES

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1.6 For dispositions, examine the following and take note of any deficiency : Memorandum of Agreement ( for transfer without cost) Memorandum of Agreement ( for transfer without cost) Official receipts ( for sale of the confiscated products/goods

EO VR RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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Authority from the agency head (if the goods are for the agencys use) Deed of Donation (for donation) Other related document EO VR

Obtain and verify the Inventory Plan as to manpower involved, timetable, reporting, cut-off and reconciliation with accounting records. Obtain the Physical Inventory Report of Confiscated Forest Products and Conveyances. Observe inventory taking to reconcile balance with the accounting records. Take note of any deficiency and document the same. Conduct alternative procedures, if necessary. Check whether the confiscated and/or forfeited products are properly kept or deposited in facilities provided for the purpose. Examine the following documents to check whether inventories are recorded in the proper period: Order of Confiscation emanating from the Regional Executive Director Order of Forfeiture coming from the Court; and Other related documents. 3.1 Verify apprehension and seizure documents for the recorded value of the confiscated items.

EO

C EO

EO

VR VM VR VM

EO VR VM

ASSERTIONFS

AUDIT PROCEDURES

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3.2 Check whether the expenses for the transfer, safekeeping, maintenance and delivery of the apprehended, seized and confiscated items are added to the value of the items. 3.3. Evaluate the net realizable value of inventory to determine the need to write down damaged, deteriorated or obsolete inventory. 4.1 Check whether the inventory account is classified under current assets and presented after the Accounts Receivable. 4.2 Check whether there is adequate disclosure regarding the account in the notes to financial statements. 4.3 Prepare Audit Observation Memorandum for the noted deficiencies. 4.4 Organize working papers including indexing and cross-referencing.

C EO VM

C EO VM PD PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

11. Spare Parts Inventory

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SPARE PARTS INVENTORY ( Account Code 167 ) Account Description: This account is used to record the cost or appropriate value of spare parts purchased for repair of vehicles, aircrafts, industrial machineries and other equipment. Audit Objectives: 1. To determine whether all inventories are completely recorded and were made accordance with laws, rules and regulations. 2. To determine the existence of inventories. 3. To determine whether inventory is valued in accordance with SFAS No. 4 as amended series of 2000 and/or Section 44 of NGAS, Volume 1. 4. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the notes to financial statements. Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Trace opening balance in the summary of schedule to prior years audit working papers. 1.2 Trace balance of the account from Trial Balance to the General Ledger to Subsidiary Ledger. Compare the balances and take note of discrepancy, if any.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.3 Trace debit postings to the account from Check Disbursement Journal (CkDJ), to Journal Entry Voucher then to Subsidiary Ledgers and finally to source documents. 1.4 Trace credit postings to the account in the General Journal, to Journal Entry Voucher, to Subsidiary Ledger, to source documents. 1.5 Obtain a copy of the approved Annual Procurement Plan and determine whether the purchases are within the procurement program. For acquisitions, examine the following documents to determine the validity, approvals, documentation and computation: Approved Disbursement Voucher (DV) Approved Purchase Order Approved Purchased Request Supplies Availability Inquiry (SAI) Inspection and Acceptance Receipt (AIR) Other related documents 1.7 Check on the mode of procurement used: Public bidding Limited source bidding Shopping Direct contracting (single source procurement) Repeat Order Purchase from direct manufacturer Purchase from exclusive distributor Personal canvass

1.6

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.8 Take note of any discrepancy. 1.9 For dispositions, examine the validity of issuances and determine whether the Report of Supplies and Materials Issued (RSMI) is supported with the following documents: Requisition and Issue Slips Other related documents And determine whether issuances /dispositions are in accordance with prescribed laws, rules and regulations. 1.10 Prepare and issue Audit Observation Memorandum for the noted deficiencies. Forward a copy to LAO pursuant to COA Circular No. 2002-053. 2.1 Obtain and review the Inventory Plan as to manpower involved, timetable, reporting, cut-off and reconciliation with accounting records. 2.2 Observe the physical inventory taking with particular attention on the use of inventory tags. Conduct alternative procedure if necessary. 2.4 Obtain copy of the Physical Count of Inventories and compare balance per count with the balance per Stock Cards, then to Supplies Ledger Cards. Take note of discrepancy, if any. C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.4

Verify harvest reports/documents for a few days before and after the year-end for recording of purchases of inventory in the proper period.

2.5 Verify whether inventory held in trust for others and/or in transit are not included in the inventory. 3.1 Determine the method adopted by the agency for costing inventory. 3.2 Re-compute Subsidiary/Supplies Ledger Card balances on a test basis and take note of discrepancy. 3.3 Verify whether cost includes appropriate elements such as taxes, insurance, freight, testing fees, etc. 3.4 Check whether cost considers cash and trade discounts, allowances, special deals, etc. 3.5 Obtain list of obsolete inventory and determine whether such inventory are written down to their current market value and provide an allowance for obsolescence. Review policy on allowance for obsolescence.

4.1 Verify whether the inventory account is classified under current assets and presented after the Accounts Receivables. Check if there is adequate disclosure regarding the account in the Notes to FS.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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accounting policies in measuring inventories, including the cost method used;

the carrying amount of inventories carried at net realizable value; and the carrying amount of inventories pledged as security for liabilities

4.3 Prepare Audit Observation Memorandum, where necessary 4.5 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

12. Construction Materials Inventory NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CONSTRUCTION MATERIALS INVENTORY ( Account Code 168 )

Account Description: This account is used to record the cost or appropriate value of construction materials purchased for projects undertaken by administration such as painting, carpentry, plumbing and electrical supplies. Audit Objectives: 1. To determine whether all inventories are completely recorded and were made in accordance with laws, rules and regulations. 2 3 4 To determine the existence of inventories. To determine whether inventory is valued in accordance with SFAS No. 4 as amended series of 2000 and/or Section 44 of NGAS, Volume 1. To determine whether the inventory account is presented in accordance with SFAS No. 4 and disclosures thereto are included in the notes to financial statements.

Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace opening balance to prior years audit working papers. of the account from Trial the General Ledger to Ledger. Compare the take note of discrepancy, if

1.2 Trace balance Balance to Subsidiary balances and any.

C EO C EO

1.3 Trace debit postings to the account from Check Disbursement Journal (CkDJ), to Journal Entry Voucher, then to Subsidiary Ledger, and finally to source documents.

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.4

Trace credit postings to the account in the General Journal, to Journal Entry Voucher, to Subsidiary Ledgers, to source documents.

C EO VR EO VR

1.5 Obtain a copy of the approved Annual Procurement Plan and determine whether the purchases are within the procurement program. 1.6 For acquisitions, examine the following documents to determine the validity, approval, documentation and correctness of the amount recorded: Approved Disbursement Voucher (DV) Approved Purchase Order Approved Purchase Request Supplies Availability Inquiry (SAI) Inspection and Acceptance Receipt (AIR) Other related documents 1.7 Check the mode of procurement used and determine whether the required procedures are complied with: Public bidding Limited source bidding Shopping Direct contracting (single procurement)

C EO VR

EO VR

source

Repeat Order Purchase from direct manufacturer Purchase from exclusive distributor Personal canvass Take note of any discrepancy.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.8 For dispositions, check the validity of issuances and verify whether the Report of Supplies and Materials Issued (RSMI) is supported with the following documents: Requisition and Issue Slips Other related documents Check whether issuances/ dispositions are in accordance with prescribed laws, rules and regulations. 2.1 Obtain and review the Inventory Plan as to manpower involved, timetable, reporting, cut-off and reconciliation with accounting records. 2.2 Check whether proper cut-off procedures are followed; examine sample receiving documents for a few days before and after the year-end for recording of purchases in the proper period. 2.3 Verify whether inventories held in trust for others and/or items in transit are not included in the inventory. 2.4 Observe the physical inventory taking particular attention on the use of inventory tags. Conduct alternative procedure if necessary.

C EO VR

C EO VM EO VM

EO VM

EO VR

3.1 Obtain copy of the Physical Count of Inventories and compare balance per count with the balance of the Stock Cards, then to Supplies Ledger Cards. Take note of any discrepancy.

C EO

ASSERTIONFS

AUDIT PROCEDURES

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3.2 Verify the method adopted by the agency for costing inventory. 3.3 Re - compute Subsidiary / Supplies Ledger Card balances on a test basis and take note of discrepancy. 3.4 Check whether the cost includes appropriate elements such as taxes, insurance, freight, testing fees, etc. Check whether cost considers cash and trade discounts, allowances, special deals, etc. Obtain list of obsolete inventory and check whether inventories are written down to their current market value and provide an allowance for obsolescence. Review policy on allowance for obsolescence.

EO VR C EO C EO VM C EO VM C EO VR VM

3.5

3.6

4.1. Check whether the inventory account is classified under current assets and presented after the Accounts Receivables. 4.2 Check whether there is adequate disclosure regarding the account in the notes to financial statements. accounting policies in measuring inventories, including the cost method used; the carrying amount of inventories carried at net realizable value; the carrying amount of inventories pledged as security for liabilities

PD

PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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4.3

Prepare Audit Observation Memorandum. Forward copy to LAO pursuant to COA Cir. 2002-053 if applicable. Organize working papers including indexing and cross-referencing.

4.4

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

3. Raw Materials Inventory NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ RAW MATERIALS INVENTORY ( Account Code 151 ) Account Description: This account is comprised of value of materials purchased for use in production.

Audit Objectives: 1. To determine whether the account is completely and properly recorded. 2. To determine whether inventories exist. 3. To determine whether inventories are properly valued in accordance with established accounting principles. 4. To determine whether recorded purchases and issuances are in accordance with regulations and rules. laws,

5. To determine whether the account is properly presented in the financial statements in accordance with generally accepted accounting principles and all disclosures pertaining thereto are made in the notes to financial statements. Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Obtain a copy of the Annual Procurement Program. 1.2 Verify the proper cut-off for acquisition and issuance of raw materials.

EO VR EO VM

1.3Perform proof of balance.

C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.4 Trace the account from Trial Balance to General Ledger a) trace debits to account to: - Check Disbursement Journal - General Journal - Source documents such as JEV, deed of donation, etc. b) trace credits to account for: - reports on issuance - relief from accountability - I & I reports for items disposed or dropped from account - cash receipt records for items sold c) examine the above documents for regularity. 1.5 Compare general ledger account balance with totals of subsidiary ledgers. Note any discrepancy. 1.6 Trace entries in the subsidiary ledger cards to the delivery receipts/receiving reports, reports on issuance/releasing reports, requisition and issue slips, invoices, etc. Verify receiving documents/ reports to check whether all deliveries received prior to the end of period under audit are recorded even when theres no bill received yet for the purchase made. Verify whether issuances before the balance sheet date have been recorded and excluded inventory. from raw materials of

C EO VR

C EO C EO VR

1.7

C EO VM

1.8

C EO VM

1.9 Check the propriety of the treatment inventories in transit.

C EO VM

ASSERTIONFS

AUDIT PROCEDURES

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1.10 Review the records of returned goods and claims against suppliers for periods before and after the cut-off date to check whether returns and claims are recorded in the appropriate period. 1.11 Check the stock ledger cards for unusual entries and price fluctuations. Verify the transactions. 1.12 Review the computations of costs entered in subsidiary ledger cards. Evaluate the reasonableness and consistency of cost methods used. 1.13 Obtain copies of inventory adjustments and review adjustments for correctness and completeness. Review extensions, footings and totals. 2.1 Obtain and review a copy of detailed procedures for the inventory-taking.

C EO VM

C EO VR C EO VR C EO

EO EO VM

2.2 Examine sample receiving documents for few days before and after year-end for recording of inventory purchases in the proper period. 2.3 Examine sample issuance documents for few days before and after year-end for recording of issuances in the proper period.

EO VM

2.4 Verify whether inventory held in trust for others and /or items in transit are not included in the inventory. 2.5 Obtain a copy of year-end/latest inventory report and/or inventory list.

EO VM EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.6 Observe the conduct of physical inventory, particularly the counting and recording procedures. a) determine if physical count is properly supervised; b) determine whether adequate procedures are employed to ensure that all inventories are counted and recorded on the tags and inventory sheets; c) verify whether count totals are adequately counter-checked by persons other than the original counter. d) trace items from list to items on stock e) review/check adequacy of procedures used in determining quantities of items not susceptible to physical count. f) check whether separate inventory sheets are prepared for items not owned by the agency. Note: If no physical count was conducted/ observed, conduct alternative procedures. 2.7 Test quantity counts to ensure accuracy of counts. Document test counts. Test, to some extent, considering materiality and risk, slow moving, obsolete, scrapped or damaged items.

C EO VR

C EO

2.8

C EO

2.9 Trace test counts to inventory summary. Take note of significant variances.

C EO

ASSERTIONFS

AUDIT PROCEDURES

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2.10 Compare and take note of discrepancies. a) inventory counts with stock cards; b) stock card with subsidiary ledger cards; c) subsidiary ledger cards with controlling account. 2.11 Review reconciliation of: a) stock cards with subsidiary cards; b) subsidiary ledger with controlling accounts. ledger cards

C EO

C EO

2.12 Verify whether reconciling items are recorded. 2.13 Confirm inventory warehouses. in other

C EO C EO

Examine purchase orders/ commitments a) verify purchase orders/contracts b) look into conditions/provision in contracts c) verify whether advances are required and how are these treated. 2.14 Confirm from suppliers partial deliveries. Verify how these are treated and recorded in the books. 2.15 Examine payment data. 2.16 Verify the existence of liens, encumbrances, assignments and pledges of inventories. Review how these are treated in the books of the agency. C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

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2.17 Verify whether there are inventories on consignment. Review how these are treated in the books of the agency. 2.18 Review extensions, footings and total summaries. 3.1 Review the cost system, basis and method of pricing being adopted for propriety and consistency of applications. 3.2 Select sample items from the inventory classification. Test costing of inventories and: a) examine related purchase orders / contracts b) verify purchase orders contract price c) trace posting of unit costs of inventory items to subsidiary ledger cards from suppliers invoice d) compute prices/values recorded in inventory records e) verify whether costing method is consistently applied 3.3 Check whether cost includes all appropriate elements such as taxes, freight, insurance, testing fees, etc.

C EO VM C EO C EO VR C EO VR VM

C EO VM C EO VM C EO C EO VM

3.4 Verify whether cash and trade discounts, allowances, special deals, etc. are included in the contract and how these are treated. 3.5 Recompute, on a test basis, unit cost and extensions of quantities and totals. 3.6 Review the pricing of the slow-moving, obsolete, scrapped or damaged items to determine whether these are the net realizable value/price.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.7 Review provision for allowance for obsolescence. Examine the purchase requests, purchase orders, disbursement vouchers and other related documents to: a) determine validity of transactions b) ascertain that the transactions were properly authorized. c) check the propriety and completeness of supporting documents d) ascertain that funds are available for the transactions e) ascertain that transactions are properly recorded in accordance with the prescribed regulations and rules f) determine whether all purchases are within the Annual Procurement Plan.

C EO VM VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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Check the mode of acquisition of raw materials, whether: Thru public bidding: a) look into the authority for and composition of the Committee on Bids and Awards b) ascertain that the bidding was given widest publication c) determine whether bidding was properly conducted in accordance with prescribed laws, regulations and rules d) determine the adequacy of the bidders bond and/or bank guarantee as fixed by laws or regulations. e) determine the adequacy of the performance bond and/or bank guarantee as fixed by laws or regulations. f) ascertain that the bidding process is adequately documented. If thru canvass/negotiated purchase: a) verify the propriety of purchase/acquisition thru canvass examine the canvass of prices made from at least three (3) bonafide and reputable suppliers b) ascertain that the prices were the lowest obtainable c) verify completeness of documents supporting the purchase

ASSERTIONFS

AUDIT PROCEDURES

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If thru donation/transfer and other modes of acquisition: a) examine the deed of donation and deed of acceptance, other documents pertinent to transfer or other modes of acquisition.

b) verify propriety and completeness of documents. 5.1 Check whether the account is presented as current asset in the balance sheet, except raw materials inventory that are to be used after the normal operating cycle and these should be removed from the current assets category. 5.2 Verify the existence of liens, encumbrances, assignments or pledges of inventories. Verify how these are treated and recorded and if appropriate disclosures/footnotes in the financial statements are made, where necessary. 5.3 Examine purchase orders/commitments and: a) verify if contract offers adequate protection for decline in market prices below purchase contract price; b) if there is no protection for decline in market price, verify if provision for accrued net loss is made; PD

C EO PD

C EO PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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c)

verify extraordinary purchase commitments in excess of reasonable requirements; d) verify if these are disclosed/ made as footnotes to financial statements. 5.5 Prepare and issue Audit Observation Memorandum for deficiencies noted. Forward to Legal and Adjudication Office if applicable.

5.4 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

14. Work in Process Inventory

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ WORK IN PROCESS INVENTORY ( Account Code 152 ) Account Description: This account records the cost and other appropriate value (labor and overhead) of job or work orders which have been started but unfinished or still in the process of manufacture as of the end of the accounting period. Audit Objectives: 1. To determine the completeness of inventory records and to determine whether recorded transactions are in accordance with laws, regulations and rules. 2. To determine the existence of inventories. 3. To determine whether inventory is properly valued in accordance with established accounting principles. 4. To determine whether the accounts are properly presented in the financial and disclosures are made, where appropriate statements

Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1

Verify proper cut-off for receipt of raw materials inventory and for issuance/transfer to finished goods inventory. Perform proof of balance. Trace account from Trial Balance to General Ledger.

EO VM

1.2 1.3

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.4 Trace debits to account to: General Journal Source documents such as JEV, etc. Receiving reports for raw materials, reports of labor charges, and reports on distribution of overhead. And trace credits to account to: General Journal Report on issuance to finished goods inventory I & I reports for items disposed or dropped from account

C EO VR

1.5 Compare total of job tickets/orders, shop orders and production orders, with work in process controlling account. 1.6 Review records of returned raw materials for periods before and after the cut-off date to check whether return claims are recorded in the appropriate period. 1.7 Trace posting to subsidiary ledger (raw materials, labor and overhead) cards. 1.8 Compare entries in the subsidiary ledger cards with the receiving and releasing records, labor cost records and overhead cost records, etc. Make sure that the cutoff for receipt and issuance has been observed. 1.9 Compare raw materials specified in job orders/tickets, production orders, shop orders with raw materials put into process. Verify variance. 1.10 Examine the distribution of overhead costs to work in process.

C EO C EO VM C EO C EO VM

C EO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.11 Verify items constituting overhead costs put into work in process. 1.12 Compare labor costs specified in job orders / tickets, production orders, shop orders with labor costs records and labor cost input to work in process. Verify difference. 1.13 Check the inventory (subsidiary) ledger cards for unusual entries and verify. 1.14 Review the computation of costs in subsidiary ledger cards. Evaluate the reasonableness and consistency of cost methods used. 1.15 Examine transactions on issuance and release documents /reports to check whether all work in process completed and transferred to finished goods inventory, prior to the end of period under audit, are actually recorded and excluded from the work in process inventory. 1.16 Verify other work in process and its costs, such as repair jobs and manufacture of fixed assets. Check whether these are excluded from the

C EO C EO

C EO C EO VM C EO VM

C EO VM

work in process inventory transferred to appropriate accounts.

and

1.20 Obtain copies of inventory adjustments and review adjustments for correctness and completeness. Reconcile any difference.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.21

Review extensions, footings and totals. Verify the cut-off for transfer of raw materials to work in process. Examine sample receiving reports and other related documents for a few days before and after the year-end for recording of raw materials issued to work in process in the proper period.

C EO VM

2.2

Examine sample issuance reports and other related documents for a few days before and after year end for recording of work in process completed and transferred to finished goods inventory in the proper period.

C EO VM

2.3 Verify whether inventories held in trust for others are not included in the inventory. 2.4 Obtain and review a copy of detailed procedures for the inventory-taking.

C EO VM

2.5 Obtain a copy of year-end/latest inventory report and/or inventory list. 2.6 Observe conduct of physical inventory, particularly the counting and

C EO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

recording procedures Check whether physical count is properly supervised. Verify whether adequate procedures are employed to ensure that all inventories are counted and recorded on the inventory sheets. Verify whether count totals are adequately counter-checked by persons other than the original counter. Trace items from list to items on stock. Review/ check adequacy of procedures used in determining quantities of items not susceptible to physical count. Check whether separate inventory sheets are prepared for items not owned by the agency.

VR VM

2.7 Test quantity counts to ensure accuracy of counts. Document test counts. 2.8 Test quantity counts to ensure accuracy of counts. Document test counts. 2.9 Test, to some extent, considering materiality and risk, slow moving, obsolete, scrapped or damaged items.

C EO

2.10 Trace test counts to inventory summary. Verify significant variances. 2.11 Review extensions, footings and total summaries.

2.12 Compare inventory summaries with subsidiary records and controlling accounts.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.13

Examine job tickets, shop orders, production orders, and related documents. Compare with actual work in process.

2.14 Identify production orders/job orders from agency clients (orders from outside clients). See that these are separately listed. 3.1 Select sample items from inventory classification. Examine related production orders, shop orders, job tickets/ orders and other related documents. Verify raw material prices, labor costs and overhead costs. C EO VR

3.2 Review the cost system, basis and method of pricing the inventories for propriety and consistency of application. 3.3 Test the costing of inventories: a) obtain and understand the costing method being adopted ; b) trace unit costs of raw materials used to suppliers invoice c) compute prices/values (raw materials, labor, overhead) recorded in inventory records d) verify whether costing method is consistently applied. 3.4 Verify cost of items constituting overhead costs put into work in process.

C EO VR VM C EO VR VM

C EO VR VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.5

Compare labor costs specified in job orders / tickets, production orders, shop orders with labor cost records and labor cost input to work in process. Verify difference.

C EO VR VM C EO VR

3.6 Check the inventory (subsidiary) ledger cards for unusual entries and verify. 3.7 Verify other work in process and its costs, such as repair jobs and manufacture of fixed assets. Ascertain that these are excluded from the work process inventory and transferred to its proper accounts. 3.8 Examine reports on spoilage. Verify how these are treated. 4.1 Check whether the account is presented as current asset in the balance sheet, except work in process inventory for jobs/production (from other clients), which should be excluded from the inventory. 4.2 Prepare Audit Observation Memorandum and forward the same to LAO if warranted. 4.3 Organize working papers including indexing and cross-referencing.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

15. Finished Goods Inventory NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ FINISHED GOODS INVENTORY ( Account Code 153 ) Account description: This account records the cost of completed job or work orders and goods manufactured/produced /processed. Audit Objectives: 1. 2. 3. 4. To determine the completeness of inventory records. To determine the existence of the inventories. To determine whether the valuation of inventories is proper and made in accordance with existing laws, rules and regulations. To determine whether the accounts are properly presented in the financial statements and disclosures are made, where appropriate.

Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Trace account balance from Trial balance to General Ledger to SL. 1.2 Perform proof of balance. 1.3 Check extensions, footings and totals. 1.4 Review the GL controlling accounts. a. trace debits to account to source documents such as JEVs, receiving reports, report on returns, etc.

C EO C EO C EO C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

b. trace credits to account to Report on issuance/transfer to merchandise inventory, shipping reports, Report on returns and Sales Report.. 1.5 Examine the receiving/ releasing documents, DVs, overhead costs, and other related documents/reports to check the: a validity of transactions; b transactions were properly authorized; c check the propriety and completeness of supporting documents; d funds are available; e proper recording of transactions in accordance with the prescribed regulations and rules. C EO C EO VR

1.6 Compare entries in the subsidiary ledgers cards with the receiving and releasing records, shipping reports, sales reports, etc. 1.7 Check the inventory (subsidiary) ledger cards for unusual entries and verify.

C EO

1.8

Obtain copies of inventory adjustments and review adjustments for correctness and completeness. Compare shipping records, prior to the end of period under audit, with invoices and inventory records Examine treatment of consignment (in and out). goods on

C EO

1.9

1.10

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.11 Verify the propriety of treatment of goods in transit. 1.12 Review the computations of costs entered in subsidiary ledger cards. Ascertain the reasonableness and consistency of cost methods used. Eliminate inventory profits. EO VR C EO VR

2.1 Check proper cut-off for transfers to and issuances from finished goods inventory. 2.2 Obtain and review a copy of detailed procedures for the inventory-taking. Obtain a copy of year-end/latest inventory report and/or inventory list.

2.3 Observe conduct of physical inventory, particularly the counting & recording procedures. a) determine if physical count is properly supervised b) determine whether adequate procedures are employed to ensure that all inventories are counted and recorded on the inventory sheets c) verify whether count totals are adequately counter-checked by persons other than the original counter. d) trace items from list to items on stock e) review / check adequacy of

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

procedures used in determining quantities of items not susceptible to physical count. f) check whether separate inventory sheets are prepared for items not owned by the agency 2.4 Test quantity counts to ensure accuracy of counts. Document test counts. 2.5 Test, to some extent, considering materiality and risk, slow moving, obsolete, scrapped or damaged items. C EO C EO C EO C EO C EO

2.6 Trace test counts to inventory summary and verify significant variances. Review extensions, footings and total summaries. 2.7 Compare inventory summaries with subsidiary records and controlling accounts. Examine receiving reports and other related documents to check whether all completed works are included in the finished goods inventory account. Examine documents to check all issuance/transfers from finished goods inventory to merchandise inventory account were properly recorded to the inventory account.

2.8

2.9

C EO

2.10 Examine related production orders, shop orders, job tickets/orders and other related documents. 3.1 Review the cost system, basis and method of pricing the inventories for propriety and consistency of application

C EO C EO VR VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.2 3.3

Select sample items from inventory. Test costing/ valuation. Verify whether inventory held on consignment for others are not included in the account.

EO VM C EO VM C EO VM C EO VM C EO VM PD

3.4 Trace cost of inventory to total cost of production (raw materials, labor and overhead). Verify any difference 3.5 3.6 Review other costs added to the inventories. Review records of returned goods for period before and after the cut-off date to check whether returns/ claims are recorded in the proper period.

4.1 Check whether finished goods inventory is properly presented as current asset in the balance sheet, except finished goods produced for others (for other clients), which should be excluded from the inventory. 4.2 Prepare and issue Audit Observation Memorandum for the noted deficiencies. Forward a copy to LAO when warranted. Organize working papers including indexing and cross-referencing.

4.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

16. Merchandise Inventory NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ MERCHANDISE INVENTORY ( Account Code 154 ) Account Description: This account records the cost or other appropriate value of merchandise and other property which have been purchased or produced for sale. Audit Objectives: 1. To determine the completeness of inventory records and whether recorded purchases and sales are in accordance with laws, regulations and rules. 2. To determine the existence, quantity, condition and ownership of the inventories. 3. To determine whether asset valuation is accurate and has been arrived at in accordance with established accounting principles. 4. To determine whether the account is properly presented in the financial statements, in accordance with generally accepted accounting principles and all disclosures pertaining thereto are made in the notes to financial statements Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Trace account balance from Trial Balance to General Ledger. 1.2 Perform proof of balance.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.3 Review the GL controlling accounts trace debits to account to: Check Disbursement Journal General Journal Source documents such as JEV, purchase orders, etc trace credits to account to: sales reports I & I reports for items disposed or dropped from account

C EO

1.4 Compare general ledger account balance with totals of subsidiary ledgers. Note any discrepancy

C EO

1.5

Obtain and review the Procurement Program (APP).

Annual

EO EO

1.6 Verify proper cut-off for acquisition/ purchase of merchandise inventory and sales. 1.7 Examine the purchase requests, purchase orders, disbursement vouchers, and other related documents for: validity of transactions transactions with proper authorization propriety and completeness of supporting documents funds availability transactions that are properly recorded in accordance with the

C VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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prescribed regulations and rules purchases within the Annual Procurement Plan. C EO

1.8

Verify the mode of acquisition of merchandise. If thru public bidding: look into the authority for and composition of the Committee on Bids and Awards ascertain that the bidding was given widest publication; determine whether bidding was properly conducted in accordance with prescribed laws, regulations and rules; determine the adequacy of the bidders bond and/or bank guarantee as fixed by laws or regulations; determine the adequacy of the performance bond and/or bank guarantee as fixed by laws or regulations ascertain that the bidding process is adequately documented

If thru other modes: verify the propriety of purchase/acquisition; Check whether the prices were the most advantageous price obtainable; verify completeness and propriety of documents supporting the purchase.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.9 Examine purchase orders / commitments. verify if contract offers adequate protection for decline in market prices below purchase contract if there is no protection for decline in market price, verify if provision for accrued net loss is made. verify extraordinary purchase commitments in excess of reasonable requirements Verify if these are disclosed/ made as footnotes to financial statements.

C EO VR

1.10 Trace entries in the subsidiary ledger cards to the delivery receipts/receiving reports, sales reports on issuance/releasing reports, requisition and issue slips, invoices, etc. 1.11 Examine receiving documents/ reports to check whether all deliveries received prior to the end of period under audit are recorded even if the bill for the purchase has not yet arrived/has not yet been received. 1.12 Examine sales documents and issuance documents to check whether all issuances before the balance sheet date have been recorded and excluded from the inventory.

C EO VR

C EO VM

C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.13 Check the propriety of the treatment of inventories in transit.

EO VR

1.14 Review the records of returned goods and claims against suppliers for periods before and after the cut-off date to check whether returns and claims are recorded in the appropriate period. 1.15 Verify the treatment of goods / merchandise consigned (in and out).

C EO VM

C EO

1.16 Compute for inventory turnover. 1.17 Check the stock ledger cards for unusual entries and price fluctuations and verify. 1.18 Review the computation of costs entered in subsidiary ledger cards. Evaluate the reasonableness and consistency of cost methods used. 1.19 Obtain copies of inventory adjustments and review adjustments for correctness and completeness. 1.20 Review extensions, footings and totals. 2.1 Check the cut-off of sample receiving reports and other related documents for a few days before and after the year-end for recording of finished goods transferred to the account in the proper period. Examine sample sales reports and other related documents for a few days before and after year end for

C EO C EO C EO

C EO C EO C EO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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recording of merchandise inventory sold in the proper period. 2.2 Verify whether inventories held in trust for others and/or items in transit are not included in the inventory. 2.3 2.4 Obtain and review a copy of detailed procedures for the inventory-taking. Obtain and review the year-end latest inventory report and/or inventory list. C EO VM C EO VM EO VR EO VR

2.5 Observe the conduct of physical inventory, particularly the counting & recording procedures : whether physical count is properly supervised whether adequate procedures are employed to ensure that all inventories are counted and recorded on the tags and inventory sheets whether count totals are adequately counter-checked by persons other than the original counter. trace items from list to items on stock review/check adequacy of procedures used in determining quantities of items not susceptible to physical count whether separate inventory sheets are prepared for items not owned by the agency.

Note: If no physical count was conducted/ observed, conduct alternative procedures.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.6 Test quantity counts to validate the count. Document test counts.

2.7

Test, to some extent, considering materiality and risk, slow moving, obsolete, scrapped or damaged items.

2.8 Trace test counts to inventory summary. Investigate significant variances. 2,9 Compare: Inventory counts with stock cards. Stock card with subsidiary ledger cards Subsidiary ledger cards with controlling account C EO

Note discrepancies. C EO

2.10 Review reconciliation of: Stock cards with subsidiary ledger cards Subsidiary ledger controlling accounts cards with

Verify whether reconciling items are recorded. 2.11 Confirm warehouses. inventory in other C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.12 Examine purchase orders commitments Look into conditions/provision contracts

C EO VR VM

verify if advances are required and made and how are these treated in the books. verify if provision for net loss is made to address decline in market prices below the purchase commitment price. 2.13 Confirm from suppliers partial deliveries. Verify how these are treated and recorded in the books. 2.14 Verify the existence of liens, encumbrances, assignments and pledges of inventories. Review how these are treated in the books of the agency. 2.15 Verify whether there are inventories on consignment. Review how these are treated in the books of the agency. 2.16 Review the propriety and adequacy of insurance coverage. 2.17 Obtain Certificate. and examine Inventory C EO VM EO VR RO EO VM C EO C EO VR

3.1 Review the cost system, basis and method of pricing for propriety and consistency of application.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.2

Select sample items from the inventory classification. Test costing of inventories examine related purchase orders/contracts verify purchase orders contract price trace posting of unit costs of inventory items to subsidiary ledger cards from suppliers invoice compute prices/values/recorded in inventory records verify whether costing method is consistently applied.

C EO VR

3.3.

Check whether cost includes all appropriate elements such as taxes, freight, insurance and testing fees, etc. Verify cash and trade discounts, allowances, special deals, etc. included in the contract and how these are treated.

C EO C EO VR VM C EO EO VR VM

3.4

3.5 Recompute , on a test basis, unit costs and extensions of quantities and totals. 3.6 Review the pricing of the slow-moving, obsolete, scrapped or damaged items to determine whether these are the net realizable value/price. 3.7 Review provision for allowance for obsolescence.

ASSERTIONFS

AUDIT PROCEDURES

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3.8 Check whether the account is presented as current asset in the balance sheet, except inventory that are to be used after the normal operating cycle, which are to be removed from the current assets category.

PD

4.1

Verify the existence of liens, encumbrances, assignments or pledges of inventories. Verify how these are treated and recorded and whether appropriate disclosures / footnotes in the financial statements are made. Verify advance payments made to vendors on purchase contracts. Verify how these are classified and recorded in the books and whether appropriate disclosures/footnotes in the financial statements are made, where necessary.

EO VR VM PD

4.3

EO PD

4.4 Verify whether any change in the method of pricing the inventories has been disclosed and explained, and the effect of the change has been indicated. 4.5 Prepare and issue Audit Observation Memorandum for the deficiencies noted. Forward a copy to LAO if warranted. Organize working papers including indexing and cross-referencing.

EO VR OD

4.6

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date Date Date B.5.2 Audit Programs for Different Property, Plant and Equipment 1. Land NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ LAND ( Account Code )

Account Description: This account is used to record the cost or appraised value or other appropriate value of land acquired by the government including property rights and interest. Audit Objectives: 1. 2. 3. 4. 5. 6. To determine the completeness of postings and balances in the financial statements and that all land owned by the agency as well as transfers and disposals of the same are properly recorded in the books. To determine that all lands recorded in the books physically exist and that the recorded acquisitions and disposals actually occurred during the period. To determine that all lands recorded and included in the inventory report are owned by the agency. To determine the propriety of the valuation and correctness of the balance of the account. To determine that the purchases, disposals and transfers of land are in accordance with applicable laws, rules and regulations. To determine that the Land account is properly and consistently classified, described and disclosed in the financial statements.

Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Trace the General Ledger (GL) beginning balance of the account from the ending balance of the previous year. 1.2 Check the accuracy of GL postings from the monthly totals of the General Journal or Check Disbursement Journal as the case maybe. 1.3 Secure a copy of the Trial Balance and the Balance Sheet. Compare the account balance in the financial statement/Trial Balance with the GL balance. 1.4 Establish ending balance. Prepare proof of balances working paper. 1.5 Check footings of the debit and credit entries in the GL. 1.6 Obtain a copy of the inventory report and subsidiary records of land showing additions and disposals during the period and other relevant information. Trace total to the general ledger. Check totals. 1.7 Verify whether account balance per inventory report agrees with SL/GL balances. 1.8 Reconcile total additions and disposals with the activity in the GL. 1.9 Verify accounting entries and trace to reports, journals and SL/GL.

C EO

C EO

C EO

C EO C EO C EO

C EO C EO C EO C EO

1.10 Prepare reconciliation working paper. Reconcile and establish causes of discrepancies, if any. Take note of any deficiencies.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.1 2.2

Physically observe the existence of all acquired land during the period. During inspection, observe and note any idle/unutilized land and those occupied by other than the agency. Vouch disposal from the disposal schedule and verify the supporting documents. Perform cut-off tests to check whether additions and disposals of land occurring immediately before and after balance sheet date are recorded in the period they occurred. Obtain and verify Transfer Certificate of Title (TCT), Deed of Absolute Sale, Tax Declaration, Deed of Donation pertaining to land and see to it that they represent genuine ownership over property. Take note of encumbrances. Confirm TCT/Tax Declarations with the Register of Deeds. Note for encumbrances.

C EO C EO VR C EO VR C EO VM

2.3

2.4

3.1

C EO VR RO

3.2

C EO VR RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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4.1 Check whether lands are carried at cost. In addition, check on the following valuation: a. If through transfer due to court order, at appraised value. b. If through expropriation, per court decision. 4.2 Check whether the following costs are capitalized and form part of the value of the land: Attorneys fees

C EO RO VM

C EO VR VM

Expenditures for establishing clean title. Cost of demolition of old building Clearing and grading Cost of relocation of property belonging to others Disposed items still in the books Actual dates of acquisition/disposals. Prepare supporting schedules.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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5.1 Examine the transaction documents relative to acquisition and disposals of land and perform the following: Vouch details to the Deed of Sale/Donation and/or other evidence of purchase, ownership or acquisition, with consideration on price and item description etc. Compare the actual cost of acquisition and/or disposal of the land with the price established by private appraisers. Verify proper approval and authorization. Verify the bidding documents and evidence of acceptance. Obtain budget for capital expenditure and compare with actual expenditure. Obtain satisfactory explanation for any variances. Confirm calculations of profit or loss on disposals and trace to retained earnings statement.

C EO VR RO VM

Compare the presentation of the land account in the financial statement with GAAP and the NGAS. Check whether disclosures are adequate and appropriate as to cost, book value and pledging of land as collateral. 5.2 Prepare AOM for deficiencies noted. 5.3 Organize working papers including indexing and cross-referencing. PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date Date Date 2 32 VARIOUS PROPERTY, PLANT AND EQUIPMENT ACCOUNTS NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ PROPERTY, PLANT AND EQUIPMENT ( Account Code ) Account Description : 2. Land Improvements - This account is used to record the cost or appropriate value of land improvements, which are more or less permanent or capital in nature such as flagpoles, sidewalks, fences, driveways, parking areas, etc. Runways/Taxiways This account is used to record cost or appropriate value of cost of construction or runways/taxiways including value of improvements in it. Railways This account is used to record cost of construction/installation of railways including value of improvement in it.

3. 4.

5. Electrification, Power and Energy Structures This account is used to record the cost of construction/installation of electrification, power and energy structures including value of equipment, materials purchased and improvements added thereon. Building and Building/Leasehold Improvements 6. Office Buildings This account is used to record the cost or appraised value of the buildings purchased or constructed including related improvements which are capital in nature. 7. School Buildings This account is used to record the cost or appraised value of school buildings purchased or constructed including related improvements, which are capital in nature. 8. Hospitals and Health Centers - This account is used to record the cost or appraised value of hospitals and health centers acquired or constructed. 9. Markets and Slaughterhouses This account is used to record the cost or appraised value of markets and slaughterhouses acquired or constructed.

10. Other Structures This account is used to record the cost or appraised value of other structures acquired or constructed. 11. Leasehold Improvements This account is used to record the cost of appropriate of improvements made on leased property. value

Office Equipment, Furniture and Fixtures 12. Office Equipment This account is used to record the cost or appraised value of equipment acquired or purchased. office

13. Furniture and Fixtures This account is used to record the cost or appraised value of furniture and fixtures acquired or constructed. 14. IT Equipment and Software This account is used to record the cost or appraised of IT equipment and software acquired, purchased or developed. value

15. Library Books - This account is used to record the cost or appraised value of books acquired. Machineries and Equipment 16. Machineries This account is used to record the cost or appraised value of machineries acquired or purchased

17. Agriculture, Fishery and Forestry Equipment This account is used to record the cost or appraised value of agricultural, fishery and forestry equipment acquired or constructed. 18. Airport Equipment This account is used to record the cost or appraised value of airport equipment acquired or purchased. 19. Communication Equipment This account is used to record the cost or appraised value of communication equipment acquired or purchased. 20. Construction and Heavy Equipment This account is used to record the cost or appraised value of construction and heavy equipment acquired or purchased. 21. Firefighting Equipment and Accessories This account is used to record the cost or appraised value of firefighting equipment and accessories acquired or purchased.

22. Hospital Equipment This account is used to record the cost or appraised value of hospital equipment acquired or purchased. 23. Medical , Dental and Laboratory Equipment This account is used to record the cost or appraised value of medical, dental and laboratory equipment acquired or purchased. 24. Military and Police Equipment - This account is used to record the cost or value of military and police equipment acquired or purchased. appraised

25. 26. 27.

Sports Equipment This account is used to record the cost or appraised value of sports equipment acquired or purchased. Technical and Scientific Equipment This account is used to record the cost or appraised value of technical and scientific equipment acquired or purchased. Other Machineries and Equipment This account is used to record the cost or appraised value of other machineries and equipment acquired or purchased not falling under specific machineries and equipment listed above.

Transportation Equipment 28. 29. 30. Motor Vehicles This account is used to record the cost or appraised value of motor vehicle acquired or purchased. Trains This account is used to record the cost or appraised value of trains acquired or purchased. Aircraft and Aircraft Ground Equipment This account is used to record the cost or appraised value of aircraft and aircraft ground equipment acquired, purchased or constructed.

31. Watercrafts This account is used to record the cost or appraised value of watercraft acquired or purchased. 32. Other Transportation Equipment This account is used to record the cost or appraised value of other transportation equipment acquired or purchased not falling under specific transportation equipment listed above. Audit Assertions: Completeness, existence or occurrence, regularity, rights and obligation, valuation or measurement, presentation and disclosure.

Audit Objectives: (Applicable to all Property, Plant and Equipment listed above nos. 2-32) 1. To determine whether all existing property, plant and equipment (PPE) of the agency are properly recorded and that postings and accuracy of account balances as presented in the financial statement are complete. 2. To determine whether all purchased items are received in good condition and bought in accordance with applicable laws, rules and regulations and that issuances, transfers and disposals of property are properly controlled and approved. 3. To determine whether all recorded PPE transactions actually occurred during the year and all existing items are still in use by the agency. 4. To determine whether all PPE items recorded and included in the inventory report are owned by the agency. 5. To determine whether all recorded balances and transactions are consistently and properly valued with reasonable allowance for depreciation. 6. To determine whether all recorded balances and transactions are properly and consistently classified, described and disclosed in the financial statements.

Assertions: Existence or Occurrence ( EO ), Completeness ( C ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ). ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Trace the General Ledger (GL) beginning balance of the account from the ending balance of the previous year. 1.2 Prove the accuracy of GL postings from the monthly totals of the General Journal or the Check Disbursement Journal as the case maybe. Check totals and establish the ending balance. 1.3 Obtain and review the Trial Balance (TB) and the Balance Sheet (BS). 1.4 Compare the account balance in the BS and TB with the GL balance. Prepare Proof of Balances working paper. 1.5 Obtain latest inventory report/ lapsing schedule and subsidiary records of Property, Plant and Equipment. Check footings and cross-footings. 1.6 Check whether account balances per inventory report/lapsing schedules are in agreement with SL/GL balances. 1.7 Reconcile / establish causes of discrepancies, if any. Prepare reconciliation working paper. 1.8 Select samples, vouch and verify accounting entries. Trace entries to reports, journals and the SL/GL.

C EO C EO

C EO C EO C EO

C EO C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.9 Analyze repairs and maintenance account to ensure that acquisitions and major repairs that prolong the life of the asset are capitalized. 2.1 For items purchased during the year, verify supporting documents for authenticity and verify whether proper approval exists during the requisition stage. Compare the actual cost of the item with the prices obtained through canvass or bidding.

C EO VR

EO VR

2.2

EO VR C EO VR C EO VR EO VR C EO VR

2.3 Verify inspection and acceptance reports upon delivery. 2.4 Verify payments for proper authorization and proper charging of funds. 2.5 Check control over the issuance of the asset to the intended user. 2.6 For transfers, retirements or disposals of property, examine underlying documents for authenticity and check adequacy of documents to support transfers, retirements or disposals and approval has been sought prior to transfers, retirements or disposals of property. 3.1 Inspect all current additions/ acquisitions/disposal/retirements.

EO VR C EO VM

3.2 Perform cut-off tests to check whether additions and disposals of property and equipment near year end are recorded in the appropriate accounting period.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.3

For other items, conduct inspection on a selective basis.

EO RO C EO RO C EOV R VM C EO VR RO EO VR

3.4 Confirm/inspect items located outside the agency premises. 3.5 Identify items which are damaged, obsolete, unserviceable or idle and verify action taken to retire or drop them from the books. On a sampling basis, check deed of donation/sale, purchase orders, contracts, Memorandum of Agreement (MOA) and other related documents to verify ownership. Review invoices, lease agreements, insurance policies, liens and encumbrances and other related documents.

4.1

4.2

5.1 Test check PPE items per inventory report/lapsing schedule whether they are recorded at cost or at other acceptable basis. 5.2 Evaluate appropriateness and consistency of depreciation method used. 5.3 Recalculate depreciation and compare with recorded changes in the accumulated depreciation. Prepare supporting schedules. Compare statement presentation with GAAP and the NGAS.

C EO VR VM C EO VR VM C EO VM

6.1

VR PD PD

6.2 Check whether the accounts are properly classified and described in the financial statements.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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6.3

Check the appropriateness of disclosures related to cost, book value, depreciation method, and useful lives of major classes of PPE, the pledging of PPE as collateral and the terms of lease contracts.

PD

6.4 Prepare AOM for deficiencies noted. 6.5 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

33. Accumulated Depreciation Property, Plant and Equipment

NAME OF AGENCY AUDIT PROGRAM

FOR THE PERIOD ________________ ACCUMULATED DEPRECIATION PROPERTY, PLANT AND EQUIPMENT ( Account Code ) Account Description: This account is used to record the cumulative reduction in value of all accounts classified under Property, Plant and Equipment subject to depreciation due to use in the course of operation or in production of income. Audit Objectives: 1. To determine whether the depreciation based on chosen method is computed and recorded properly in the appropriate period. 2. To determine whether the depreciation method used is acceptable and being followed consistently. 3. To determine whether the account is properly presented and disclosure in the financial statements is made. Assertions: Completeness ( C ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Obtain or prepare a summary of analysis of accumulated depreciation for the major property classification as shown by the general ledger control accounts, listing beginning balances, provisions for depreciation during the year, retirements, and ending balances.

1.2 Compare beginning balances with the audited amounts in last years working papers.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.3 Compare the totals of accumulated depreciation recorded in the plant and equipment subsidiary records with the GL accounts. 1.4 Trace and analyze retirements of assets during the year. 1.5 Test the accuracy of accumulated depreciation to date of retirement. 2.1 Review the depreciation policies in company manuals or other management directives. Check whether the methods used are designed to allocate costs of plant and equipment assets equitably over their service lives. 2.2 Review the estimated useful life for each class of PPE if it conforms with NGAS and GAAP. 2.3 Perform analytical depreciation: procedures for

C EO

C EO C EO C EO VRV M

C EO VR C EO VR VM

a. Compute the ratio of depreciation expense to total cost of PPE and compare with prior years; b. Compare the percentage relationship between accumulated depreciation and related property accounts with that prevailing in prior years. Discuss significant variations from the normal depreciation program with management. 2.4 Prepare and issue AOM for the noted deficiencies.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.5 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

34.

Construction in Progress

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ COSTRUCTION IN PROGRESS - _____________ ( Account Code ) Account Description : Construction in Progress Agency Assets This account is used to record the cost or accumulated value of agency assets that are still under construction. Construction in Progress Plaza, Parks and Monuments . This account is used to record the cost or accumulated value of plaza, parks and monument which are still under construction. Construction in Progress Roads, Highways and Bridges This account is used to record the cost or accumulated value of roads, highways and bridges that are still under construction. Construction in Progress Ports, Lighthouses, Harbors, Seawalls, River Walls and Others - This account is to record the cost or accumulated value of ports, lighthouses, harbors, seawalls, river walls and other waterway improvements which are still under construction. Construction in Progress Airports and Runways This account is used to record the cost or accumulated value of airports and runways that are still under construction. Construction in Progress Railways This account is used to record the cost or accumulated value of railroad tracks and stations that are still under construction. Construction in Progress Waterways, Aqueducts, etc . This account is used to record the cost or accumulated value of waterways, aqueducts, etc. that are still under construction. Construction in Progress Irrigation, Canals and Laterals - This account is used to record the cost or accumulated value of irrigation, canals and laterals that are still under construction. Construction in Progress Electrification, Power and Energy Structure This account is used to record the cost or accumulated value of electrification, power and energy structure that are still under construction. Construction in Progress Other Public Infrastructures This account is used to record the cost or accumulated value of all other public infrastructures not classified under specific type of public infrastructure accounts that are still under construction. Construction in Progress Reforestation Projects This account is used to record the cost or accumulated value of all reforestation projects, that are still under construction. Audit Objectives:

1. To ascertain the completeness of account balances as recorded in the books and whether completed projects are correctly reclassified to appropriate Plant, Property and Equipment accounts. 2. To determine the physical existence of implemented projects. 3. To ascertain whether all transactions charged to the account are incurred in connection with the prosecution of the projects. 4. To determine whether the accounts are properly and consistently classified and presented in the financial statements and that disclosures made are adequate. Assertions: Completeness ( C ), Validity/Legality or Regularity ( Va/LR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Trace beginning balance to prior years audit working paper/ending Balance of prior years financial statements and General Ledger. 1.2 Trace debit and credit postings in the General Ledger to the Check Disbursements Journal / Cash Disbursements Journal and General Journal to the Report of Disbursements / Reports of Checks Issued. 1.3 Foot the debit and credit entries in the GL and establish the balance. 1.4 Obtain copy of Trial supporting schedules. Balance and

1.5 Compare the GL balance with the balance in the Trial Balance or B/S and the SL. 1.6 Obtain list of Equipment/Motor vehicles purchased out of the project funds.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.7 1.8

Compare Project Status Report in 2.2 against report in 2.1. Identify completed projects properly and perform the following: Ascertain that there was a duly approved Certificate of Inspection & Acceptance and Certificate of Completion by the Agency. Ensure that the equipment / motor vehicles are turned-over to the agency and recorded in the appropriate PPE account. Ensure that the costs of the items turned-over are deducted from the project cost. Compare total amount of completed projects during the year with the amount transferred to the appropriate PPE.

1.9

Determine whether completed projects implemented by the Agency in behalf of other government agencies are dropped from the agency books upon acceptance by the recipient agency thru JEV. If not,

obtain an explanation from management.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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2.1

Prepare Quarterly List of Infrastructure Contracts charged to CIP using the attached format. On a test basis, verify status, and physical existence of on-going and completed projects. Technical review and inspection of projects-tie-up with the Audit Program prepared by the technical staff.

2.2 Obtain report on status of all projects at the end of the year. Take note of projects which were discontinued / terminated. Investigate reasons for discontinuance / termination of the projects. 3.1 Prepare working paper for the analysis of account. 3.2 Verify on a sampling basis, DVs and supporting documents to check regularity and propriety of transactions. Take note of Equipment/Motor Vehicles/other PPE paid out of project funds.

3.3 Secure copy of all project cost sheets and on a test basis, validate entries and computations by tracing to DVs and supporting documents. 3.4 Prepare a summary of all expenses charged to the projects on a monthly and on a per project basis and identify expenditures not related to the project. Trace JEV entries of sample transactions obtained in 3.4 above. 3.6 Compare totals in the Summary with the amount posted in the GL.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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4.1 Compare statement presentation with the NGAS and GAAP. 4.2 Check whether the account is properly identified and classified in the financial statements. 4.3 Check whether appropriate and/or adequate disclosures on the account are made in the notes to financial statements. 4.4 4.5 Prepare and issue AOM for the noted deficiencies. Organize working papers including indexing and cross-referencing.

VR PD

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

B.6 OTHER ASSETS

B.6.1 Accounting Policies and Standards affecting Other Assets

An all inclusive heading for accounts that do not fit neatly into any of the other asset categories (e.g. long-term prepaid expenses, deferred taxes, bond issue costs, non-current receivables and restricted cash). Because of the vagueness of the term other assets any significant items within this category should be adequately described in the notes to the financial statements. B.6.2 Audit Programs for different Other Assets accounts 1. Work/Other Animals NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ WORK/OTHER ANIMALS ( Account Code 281 ) Account description: This account is used to record the cost or appraised value of work animals acquired or purchased. This includes those in the zoo, wildlife, sanctuary, etc. Audit Objectives: 1. 2. 3. 5 To determine the existence of the work animals. To ascertain the correctness of the account balances as of the end of the financial period. To determine the proper valuation of the work animals. 4. To ascertain whether the acquisitions, utilization and dispositions of the animals are made in accordance with laws, rules and regulations. 4. To determine whether the account is properly presented and the required disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

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1.1 Obtain the latest physical inventory report. Check the report against the property ledger cards. 1.2 Conduct inspection/physical count on a selective basis to test the correctness of records.

C EO

C EO

1.3 Check the status of the animals and verify condition. 1.4 Inquire the action taken by management on items retired or written off from the books. 1.5 Inspect Memorandum Receipts (MRs) if applicable. 1.6 Trace the account in the Balance Sheet to the Trial Balance to the GL. 2.1 Trace postings to the property ledger cards. 2.2 Compare totals of the property ledger cards or SL with the GL and take note of any difference. 2.3 Check whether the acquisitions, purchases and disposals made during the period are recorded properly and verify significant variation.

EO

C EO

EO

C EO C EO C EO C EO VM

ASSERTIONFS

AUDIT PROCEDURES

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3.1 Based on the agency schedule, select major additions and perform the following procedures: Check whether additions are recorded at cost or in other basis in accordance with generally accepted accounting principles. Check whether there is proper approval by authorized officials. Reconcile total additions by purchases charged against capital outlay. 3.2 Obtain and review schedule of disposals. 3.3 Check whether the items are dropped from the books in case of loss or destruction. 3.4 Inquire the action taken by management to recover the value of the missing animals, if any. Trace disposition by sale to cash receipts or accounts receivable and to the income or appropriate revenue account. 4.1 Obtain list of properties subject for disposal. Review list and conduct inspection to verify the condition of the properties. Check whether disposal is thru public auction unless a more appropriate mode of disposal was used. If not thru public auction, obtain justification

C EO VR VM

EO C VM VR VM C EO VM C EO

4.2

EO

ASSERTIONFS

AUDIT PROCEDURES

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4.3

Verify whether the properties were purchased thru public bidding unless a more appropriate mode of procurement was used. If not thru public bidding, obtain justification.

VR

4.4 Review policies and procedures towards efficient and effective utilization and/ or care of animals. 4.5 Check whether the existing procedures on maintenance of animals are the most economical means and effective ways. 5.1 Check whether the account is properly presented in the Balance Sheet and the necessary disclosure is made in the financial statements. Prepare and issue AOMs for the noted deficiencies. Organize working papers including indexing and cross-referencing.

VR

EO VR PD

5.2 5.3

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

2. Breeding Stocks

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ BREEDING STOCK ( Account Code 282 ) Account Description: This account is used to record the cost or appraised value of breeding stocks acquired or purchased. Audit Objectives: 1. To determine the existence of the Breeding Stocks. 2. To ascertain the correctness of the account balances as of the end of the financial period . 3. To determine whether the account is properly valued. 4. To ascertain whether the acquisition, maintenance, custodianship and disposition of the asset are made in accordance with laws, rules and regulations. 5. To determine whether the account is presented properly in the Balance Sheet and the necessary disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

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1.1 Obtain and review the latest physical inventory report. 1.2 Check the report against the property ledger cards. Conduct inspection/physical count on a selective basis to test the correctness of records.

C EO C EO C EO

1.3

ASSERTIONFS

AUDIT PROCEDURES

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1.4 Identify the status of animals and verify their condition. 1.5 Inquire the action taken by management to write off from the books. 1.6 Inspect Memorandum Receipts (MRs) if applicable. Vouch invoices and receipts 2.1 Trace the account in the balance sheet to the TB,GL and SL

EO EO EO C EO C EO C EO VM C EO VR

2.2 Trace posting of vouchers to the property ledger cards. 2.3 Check whether the acquisitions, purchases and disposals made during the period are recorded properly and verify significant variation. 3.1 Based on the agency schedule, select major additions and perform the following procedures: Check whether additions are recorded at cost or in other basis in accordance with generally accepted accounting principles. Check whether there is proper approval by authorized officials. Reconcile total additions by purchases charged against capital outlay. 3.2 Obtain and review schedule of disposals. 3.3 Check whether the items are dropped from the books in case of loss or destruction.

C EO VR C VM

ASSERTIONFS

AUDIT PROCEDURES

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3.4 Inquire the action taken by management to recover the value of the missing animals, if any. 3.5 Inquire actions taken to recover the value of the missing animals. 3.6 Trace dispositions by sale to cash receipts or accounts receivable and to the income or appropriate revenue account. 4.1 Review existing procedures to insure the proper and effective maintenance and custodianship of the breeding animals at the most economical cost. Obtain list of properties subject for disposal. Review list and conduct inspection to verify the condition of the properties.

EO VM VM EO VR EO VR

4.2

EO

5.1 Check whether the account is properly presented in the Balance Sheet and the necessary disclosure is made in the financial statements. 5.2 Prepare and issue AOM for the noted deficiencies. 5.3 Organize working papers including indexing and cross-referencing. REVIEWED BY :

PD

PREPARED BY :

APPROVED BY :

Date 4. Items-in-transit

Date NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

Date

ITEMS-in-TRANSIT ( Account Code 284 ) Account Description: This account is used to record the cost or accumulated value of imported equipment already paid but not yet delivered / received. Audit Objectives: 1. To ascertain the existence and completeness of the account balance and the propriety of charges. 2. To determine compliance of transactions with existing laws, rules and regulations. 3. To determine whether the account represents proper valuation of items. 5. To determine whether the account is properly presented in the Balance Sheet and the necessary disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( Va/LR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

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1.1 Trace account balance in the Balance Sheet to the Trial Balance to GL. 1.2 Check the schedule against subsidiary ledgers. 1.3 Verify the correctness of postings in the SL, through the General Journal (GJ), Check Disbursements Journals (CkDJ), Report of Checks Issued (RCI), to the Journal Entry Voucher (JEV).

C EO C EO C EO

1.4 Trace posting of vouchers to the SL. Check totals in the GL, SL and schedules.

C EO

ASSERTIONFS

AUDIT PROCEDURES

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2.1 Examine the JEV and documents for the following: a. a. b. c.

C EO VR

regularity and validity approval and authorization accuracy of computation correctness of accounting entries.

Supporting documents for importation: a. Certificate of Marginal Deposit b. Letters of Credit c. Bill of Lading d. Other commercial papers 3.1 Check whether valid items still in transit are recorded in the proper period. 4.1 Check whether the account is presented properly in the Balance Sheet and the necessary disclosure is made in the financial statements. 4.2 4.3 Prepare and issue AOM on the noted deficiencies. Organize working papers including indexing and cross-referencing. VM PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date 4. Other Assets

Date

Date

NAME OF AGENCY AUDIT PROGRAM

FOR THE PERIOD ________________ OTHER ASSETS ( Account Code 290 ) Account Description: This account is used to record the value of obsolete and unserviceable assets as well as other assets still serviceable but no longer in use. These items are not subject to depreciation. Audit Objectives: 1. To determine the existence of the properties . 2. To ascertain the completeness of the account balance as of the end of the financial period. 3. To determine the proper valuation of the property. 4. To ascertain whether the maintenance, custodianship, and dispositions of the properties comply with laws, rules and regulations. 5. To determine whether the account is properly presented in the Balance Sheet and the necessary disclosure is made in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( Va/LR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

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1.1 Obtain and review the latest physical inventory report. 1.2 Check the report against the property ledger cards. 1.3 Conduct inspection/physical count on a selective basis to test the correctness of records.

C EO C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.4 Identify the status of the properties and verify if same are damaged, obsolete, unserviceable or idle. 1.5 Inquire as to action taken by Management to retire or write them off from the books. 1.6 Inspect Memorandum Receipts (MRs) if applicable. Vouch invoices and receipts. 2.1 Trace the entries in the balance sheet, to the general ledger, and to the underlying vouchers. 2.4 Trace postings of post-audited vouchers to the property ledger cards. Compare totals of the property ledger cards or subsidiary ledgers to the general ledgers and investigate differences.

C EO

EO VR

EO VR

C EO C EO C EO EO VR C EO VR VM

2.3

3.1 Review the acquisitions, purchases, and disposals during the financial period and verify significant variations. 3.2 Based on the agency schedule, select major additions and perform the following procedures: Ensure that additions are recorded at cost or other bases in accordance with generally accepted accounting principles. Check if there is proper approval by authorized officials.

ASSERTIONFS

AUDIT PROCEDURES

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Reconcile total additions by purchases charged against capital outlay. 3.3 Obtain and review schedule of disposals during the audit period to check whether assets are dropped from the books in case of loss or destruction. C EO VR VM

3.4 Inquire into recover the property.

actions value of

taken to the missing

VR VM

3.5 Trace dispositions by sale to cash receipts or accounts receivable and to the income or appropriate revenue account. 4.1 Obtain list of properties subject for disposal. Review list and conduct inspection to verify the condition of the properties. 4.2 Verify whether disposal is thru public auction unless a more appropriate mode of disposal was used. If not thru public auction, obtain justification. 4.3 Check existing procedures to validate that these are the proper and effective maintenance and custodianship of properties at the most economical cost.

C EO VM C EO VM

VR

C EO

ASSERTIONFS

AUDIT PROCEDURES

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5.1

Check whether the account is properly presented in the Balance Sheet and the necessary disclosure is made in the financial statements.

PD

5.2 Prepare and issue AOM for the noted deficiencies. 5.3 Organize working papers including indexing and cross-referencing.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date Date B.7.2 Audit Programs for Various Liability Accounts 1. Accounts Payable NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ ACCOUNTS PAYABLE ( Account Code 401 )

Date

Account Description: This account is used to record indebtedness to contractors/ suppliers arising from the purchase of goods and services and other obligations in connection with the agencys operations/trade/ business. Audit Objectives:

1. To determine whether all recorded and reported outstanding accounts payable as of balance sheet date represent bona fide and legitimate claims of suppliers for goods and/or services delivered during the period under audit 2. To ascertain that all amounts debited and credited to accounts payable during the period under audit represent transactions and events which actually occurred which either gave rise to, or reduced enforceable claims of suppliers against the auditee 3. To ascertain that there are no bona fide transactions with suppliers during the period under audit that have remained unrecorded as at balance sheet date. 4. To ascertain that all recorded purchase obligations have complied with all the pertinent procurement and budgetary rules and regulations governing the acquisition of goods and services. 5. To determine whether the outstanding balances of trade payables as at the end of the period under audit are properly identified and classified in the balance sheet, and that full disclosure of all significant/material information relative to the account is made in the notes to the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

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1.1

Check whether the beginning balance of this account is the ending balance in the immediately preceding periods audited Balance Sheet.

C EO

C 1.2 Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger for Accounts Payable. 1.3 Obtain aging schedule of all outstanding accounts payable and determine whether there are balances aged more than two years to determine their validity or legitimacy and to identify those that should be reversed to the General Fund. C EO VM

ASSERTIONFS

AUDIT PROCEDURES

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1.4

Using an appropriate sampling methodology, vouch to supporting documents the recorded payables (additions to the account) for goods and or services delivered during the period, as well as all payments/ deductions to the account during the period under audit. For sample transactions credited to account which were vouched or substantiated using the approved sampling methodology, physically inspect or examine goods or services delivered to ascertain not only their actual delivery which gave rise to the liability but also their compliance with specifications which may affect amount of the obligation recognized.

C EO

2.1

C RO VM

2.2 In case delivered items procured on credit were already consumed or distributed to end users, check issuance documents and acknowledgement of end users. If feasible, physically inspect items in the custody of end users. 3.1 Obtain a schedule of outstanding trade payables as at the end of the period under audit and check amounts in the respective subsidiary ledgers to ascertain accuracy of amount and determine whether these are actually unpaid per SL. Check agreement of the total of said Schedule with the General Ledger balance and determine if there are discrepancies caused by unrecorded payables or payments thereof during the period.

C EO

3.2

C EO

ASSERTIONFS

AUDIT PROCEDURES

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3.3 Review payment transactions to suppliers made in the period immediately prior to period under audit, as well as those made subsequent to balance sheet date, to ascertain whether there were any unrecorded liabilities. 3.4 Search for unrecorded payables by examination of open suppliers invoices/ contractors statements received to ascertain that they have been recorded as accounts payable as of balance sheet date.

C RO

3.5 Confirm the balance of selected payables by direct correspondence with creditors particularly those with significant balances, debit balances and with small, and zero balances with whom the agency has done significant business/transactions. Determine any unrecorded trade payables. 3.6 Document and summarize unrecorded purchase obligations as well as payments therefore.

C EO RO VM

4.1 While vouching or performing substantive test of details of balances to check on occurrence and validity of all recorded payables, simultaneously check on compliance with applicable laws, rules and regulations governing procurement of goods and/or services. 4.2 Verify unpaid vouchers/claims and check whether those pertaining to the audit period, except those covering authorized obligations not covered by allotments, are covered by OS.

VR

C VR

ASSERTIONFS

AUDIT PROCEDURES

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4.3 Ensure that all purchase transactions are duly approved by the proper authority and are covered by the appropriate funding/appropriation. 5.1 Determine whether there are payables to trade creditors with debit balances which sum or total is significant so as to require separate disclosure in the Balance Sheet. 5.2 Determine whether significant items/matters pertaining to the account are appropriately/adequately disclosed in the Notes to Financial Statements.

VR

VM PD

PD

5.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

2. Intra-Agency Payables Accounts : Due to Central Office ( 421 ) ; Due to Regional Office ( 422 ); Due to Operating Unit ( 423 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE TO _______________ ( Account Code ) Account Description: These accounts are used to record (1) inter-office transactions between Central, Regional, and Operating offices as well as (2) payables to Central Office or Regional Office at year end equivalent to the unobligated balance of allotments covered by funding check (except those for continuing appropriation ) Audit Objectives: 1. To ascertain the following: The recorded balance of the Due to Central Office account by the regional or operating offices /staff bureaus/operating units of the same department actually represent inter-office transactions that took place during the period under audit; or the unobligated balance as of the end of the period under audit of sub-allotments received by them from the national office which were covered by funding checks; The recorded balance of the Due to Regional Office/staff bureau account, actually represent inter-office transactions in the books of the regional office/staff bureau/operating unit during the period under audit; and the unobligated balance at the end of the period under audit of LAAs given to operating units which were covered by funding checks and which have not been remitted back. The balance of the Due to Operating Office account as of the end of the period under audit in the books of the regional office actually represent inter-office transactions during the period under audit.

2.

To determine whether: all intra-agency payable balances at year end include all the outstanding payables as of balance sheet date;

all intra-agency obligations which arise during the period under audit are recorded and; all intra-agency payables paid or terminated during the period under audit have been completely recorded.

3. To ascertain whether existing intra-agency payables are properly recorded and shown in the Balance Sheet in conformity with GAAP and NGAS. 1. To determine whether all applicable NGAS policies and the pertinent laws, rules and regulations covering inter-office transfer of funds within the same department have been followed.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation or Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

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1.1 Check whether the beginning balance of


this account is the ending balance in the immediately preceding periods audited Balance Sheet. 1.2 Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger for intra-agency payable accounts. Compare the Balance of the Due to Central Office/Operating Unit in the Regional Office Balance Sheet with the balance of the same accounts in the General Ledger of the RO; or Due to Regional Office/Operating Unit appearing in the Central Office Balance Sheet with the balance appearing in the General Ledger of said CO payable accounts; or

C EO

C EO

1.3

C EO

1.4

C EO

ASSERTIONFS

AUDIT PROCEDURES

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1.5

Due to Operating Unit appearing in the Balance Sheet of either the

C EO

CO or the RO with the balance of the said account as appearing in their General Ledger ---- and note and investigate any difference, if any. 1.6 Obtain a schedule of the Due to Regional Offices and Due to Central Office accounts and compare their total with the GL balance of these accounts. Note any difference and investigate/determine cause. 1.7 Vouch to supporting documents additions and deductions to these accounts. 1.8 When the audit client is a National Office, confirm and match the recorded outstanding payables to the Regional Offices and to the Operating Units, respectively with their recorded receivables from the client. 1.9 Likewise, where the client is a Regional Office, confirm and match its recorded outstanding payables to the National Office and the Operating Units with the latters receivables from the audit client. 1.10 Do the same for the client Operating Offices payables to the National Office and to the Regional Office. C

C EO RO C EO RO

C EO RO

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

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1.11 Determine whether reconciliation of differences has been made by the corresponding offices and the bookkeeping errors found adjusted accordingly.

C 2.1 Examine file of all SAAs and issuances of funding checks to regional and operating offices and determine if there are no unrecorded allotments or suballotments in the corresponding SL and the GL. 2.2 Examine remittances of regional offices and operating units in the succeeding period of the unused portion of their allotment which they received thru funding check to determine if there were unrecorded allotments. 2.3 While vouching to supporting documents the recorded debits and credits to these accounts relative to the financial statement assertion of validity, also determine from documents examined, whether there are inter-office transactions that have not been recorded. 2.4 Confirm with the Central Office, Regional Office, or Operating Office as the case may be and reconcile any differences so as to identify unrecorded inter-office payables. C

C EO

C EO

3.1 Check whether all inter-office payables are appropriately disclosed as Current Liabilities under the appropriate account heading.

VM PD

ASSERTIONFS

AUDIT PROCEDURES

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4.1

While vouching the additions and deductions to inter-office accounts to their supporting documentation, likewise check for compliance to pertinent laws rules and regulations.

4.2 Note and document any exception. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

3.

Inter-Agency Payables Accounts : Due to NGA ( 416 ), GOCC ( 417 ) , or LGU ( 418 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE TO _______________ ( Account Code ) Account Description: These accounts are used to record liabilities of government with one another, for inter agency transactions such as the following: a. transferred funds received for the implementation of specific programs or projects; b. receipt of goods delivered by the other government agency; c. services rendered by another government agency; d. cancelled checks for which replacement should be made; e. amounts collected for the account of an LGU or another government agency; f. Advances received for specific purposes or expenditures Audit Objectives: 1. To determine whether the recorded outstanding inter-agency payables as at quarter end/year-end are bona-fide fund transfers for project/program implementation covered by a Memorandum of Agreement (MOA). To determine that all inter-agency obligations incurred during the period under audit comply with laws, rules and regulations. To ascertain that all transactions affecting this account during the period under audit have been recorded. agencies

2. 3.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation or Measurement ( VM )

ASSERTIONFS

AUDIT PROCEDURES

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1.1 Trace their beginning balances to the prior years audited balance. 1.2 Compare the quarter end/year-end balance of these accounts in the Balance Sheet with their corresponding balance in the General Ledger. Note differences and determine the necessary adjustment/corrections to be made. 2.1 Trace all recorded additions or credits in the Subsidiary Ledger of these accounts to the Journal of Collections and Deposits or General Journal and then to the corresponding journal entry vouchers and vouch to supporting documents. 2.2 In the process of vouching to supporting documents verify compliance with the provisions of the MOA and with pertinent rules and regulations. 2.3 Vouch also all recorded deductions or debits in the Subsidiary Ledger down to the liquidation reports and copies of supporting documents submitted to the creditor agencies concerned. 3.1 Obtain Aging Schedule of outstanding balances of each inter-agency payable account with the balances therein with their subsidiary ledgers. 3.2 Compare the total of the Aging Schedule with the balance in the Subsidiary Ledgers and request the auditee to reconcile observed differences, if any .

C EO C EO

C EO RO

VR

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

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3.3 Examine the Aging Schedule. Confirm a reasonable percentage of long outstanding accounts. Summarize confirmation results and evaluate them. Give immediate attention to and investigate exceptions made by the respondent creditor agencies particularly on significant differences re: liquidations already made which have not been received by the latter. 3.4 Note and document any exception and prepare and issue AOM.

C EO VM

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

4. Due To National Treasury Account

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE TO NATIONAL TREASURY ( Account Code 411 ) Account Description: This account is used to record collection due for remittance to the Bureau of Treasury Audit Objectives: 1. To ascertain that all recorded additions to the account during the period under audit actually represent actual collections of the auditee of income in favor of the national government, and all recorded deductions represent actual remittances of such collections; and that the recorded outstanding balance of the Due to National Treasury account as of balance sheet date actually represent unremitted collections due to the National Government. 2. To ascertain that all unremitted collections of income due the national government have been completely recorded in the books. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

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1.1 Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger. Note the discrepancy, if any. 1.2 Trace the beginning balance of

C EO

C EO

ASSERTIONFS

AUDIT PROCEDURES

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this account in the General Ledger to the prior periods audited balance. 1.3 Trace the recorded additions or credits as well as debits or deductions in the General Ledger to the Journal of Collections and Deposits and then to the corresponding Abstract of Collections and to the Official Receipts. 1.4 Examine copies of remittance advices to the National Treasury, as well as the copies of the deposit slips duly acknowledged by the proper bank officials. C EO RO

C EO RO

1.5 Send confirmation letters to the National Treasury or to the authorized government depository banks 1.5 Send confirmation letters to the National Treasury or to the authorized government depository banks to validate the recorded remittances. 2.1 Obtain a schedule of unremitted collections as of balance sheet date. 2.2 Match recorded collections with recorded deposits to determine and account for all unremitted collections during the period, and compare with the schedule obtained in Procedure 2.1. 2.4 Check the remittances after balance sheet date pertaining to collections of the prior period and check if the same were recorded as Due to National

C EO RO

C EO RO C

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

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Treasury as of balance sheet date. 2.4 Document all unrecorded unremitted collections due to the National Treasury. C EO RO

2.5. Prepare AOM for all the documented exceptions in the audit of this account.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

5. Due To Other Government Agencies For Statutory Deductions Accounts: Due to BIR ( 412 ) , Due to GSIS ( 413 ), Due to PAG-IBIG ( 414 ), Due to PHILHEALTH ( 415 )

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE TO ______________ ( Account Code ) Account Description: These accounts are used to record amounts withheld from government employees for the account of government corporations for mandatory deductions such as: 1. 2. 3. 4. 5. 6. Retirement and life insurance Salary and policy loan amortizations Emergency or educational loan amortizations; PAG-IBIG contributions Health insurance premiums, Etc.

Audit Objectives: 1. To determine whether all outstanding payables to BIR, PAG-IBIG, GSIS and PHILHEALTH actually represent legitimate deductions/amounts withheld in behalf of these government agencies which have not yet been remitted to them as of balance sheet date. 2. To ascertain that the recorded additions or credits to the account during the period under audit actually represent actual authorized deductions for other government agencies during the period, and that all recorded deductions to the account represent actual remittances of such deductions. 3 To determine whether all statutory deductions made for BIR, GSIS, PAG-IBIG and PHILHEALTH during the period under audit and all remittances thereof in the same period were completely recorded in the books.

4. To ascertain that all pertinent laws and regulations governing statutory deductions and their remittance have been complied with by the auditee. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO )

ASSERTIONFS

AUDIT PROCEDURES

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W P Re f

1.1

Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger.

C EO

1.2 Check whether the beginning balance of this account is the ending balance in the immediately preceding periods audited Balance Sheet. 1.3 Trace the recorded additions or credits in the General Ledger to the Journal of Disbursements and then to the Report of Disbursements and vouch to supporting documents. 1.4 Trace the recorded deductions or debits in the General Ledger to the Journal of Checks Issued, Journal Entry Vouchers and vouch supporting document. 2.1 Obtain a list or schedule of the amount

C EO

C EO RO

C EO RO C

payable to these agencies as of balance sheet date. Compare the total per schedule per agency and check against the balance per subsidiary ledgers and the General Ledger.
2.2 Obtain a list of all employees and the computed total deductions made from period to period. Analyze fluctuations and compare with recorded credits to these accounts to determine any possible unrecorded deductions. Check whether the computations of the deductions or amounts withheld are in accordance with the regulations prescribed by these agencies. C

3.1

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.2 Ascertain that remittances were recorded properly and that these were made within the timeframe prescribed by these agencies. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

C VR

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

6.

Due To Officers and Employees

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DUE TO OFFICERS and EMPLOYEES ( Account Code 403 ) Account Description: This account is used to record the amount of liabilities due to officers and employees of the agency for (1) unpaid salaries, (2) fringe benefits, (3) other emoluments and other obligations, as well as (4) the cancellation of checks issued to officers and employees which are subject to replacement . Audit Objectives: 1. To determine whether all recorded outstanding payables to Officers and Employees as at balance sheet date actually represent existing and legitimate claims of these officers and employees of the auditee. 2. To determine compliance with pertinent laws, rules and regulations re: recognition and payment of payables to officers and employees. 3. To determine whether all outstanding obligations of the agency to its officers and employees have been completely recorded in the books as of balance sheet date.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Check whether the beginning balance of this account is the ending balance in the immediately preceding periods audited Balance Sheet .

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2

Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger. Trace all recorded deductions or debits in the General Ledger Journal of Checks Issued, then to the Report of Checks Issued and the corresponding Journal Entry Vouchers. Examine / vouch using an appropriate sampling methodology, whenever applicable, the source documents which were the basis for credits and debits to this account and check whether these transactions occurred during the period under audit.

C EO

1.3

C EO RO

1.4

C EO RO

2.1 While vouching, also examine supporting documents for compliance with pertinent laws, rules and regulations governing the recognition and payment of payables. 2.2 Obtain a list or prepare a schedule of the account Due to Officers and Employees indicating information as to the name of employees, particular claim like salaries, fringe benefits, other emoluments, period covered, and amount due.

VR

3.1 Foot the list or the schedule obtained from the agency and compare the total with the balance per General Ledger.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.2 Trace the details of the list against the Subsidiary Ledgers. Verify footing and compare the total amount in the Subsidiary Ledgers against the General Ledger balance. 3.3 Trace all recorded additions or credits in the General Ledger for the account Due to Officers and Employees to the Subsidiary Ledgers. 3.4 Examine payments to officers and employees immediately after balance sheet date relating to prior periods and determine if these were unrecorded payables as of balance sheet date.

C EO RO

3.5 Investigate accounts which have been inactive for a long period of time and obtain explanations from management. 3.6 Take note of deficiencies, if any. Prepare and issue AOM.

EO

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

7. Guaranty Deposits Payable ( 426 ) and Performance/Bidders Bond Payable ( 427 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ _______________ PAYABLE ( Account Code ) Account Description: This account is used to record the amount of liabilities arising from the receipt of cash bond to guarantee performance of the term of the contract, participation in the bidding, and compliance with court orders. Audit Objectives: 1. To determine whether all recorded outstanding Guaranty Deposits Payable as of balance sheet date actually represent cash received during the period under audit to: a. cover possible damage to property, or guaranty performance which amounts received are refundable/returnable to the depositor upon completion of the purpose for which it was given (e.g. deposits on returnable containers, rental deposits, etc.) and b. all recorded Bidders Bond payable represent receipt of cash bond to guarantee performance, the terms of the contract, participation in bidding, and compliance with court orders. 2. To ascertain that all credits to these accounts actually represent the occurrence of the receipt of moneys for the above stated purposes, and that all debits represent the refund of unused guaranty deposits or forfeiture/application of retention money/guaranty deposits, or the refund of Performance/Bidders bond or their forfeiture in case of noncompliance.

3. To ascertain that all transactions recorded to this account comply with all pertinent laws, rules and regulations. 4. To ensure that there are no unrecorded Guaranty Deposits Payables or Performance/Bidders Bonds Payables and that there are no refunds, forfeitures or applications that have not been given accounting recognition.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO )

ASSERTIONFS

AUDIT PROCEDURES

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W P Re f

1.1 Check whether the beginning balance of this account is the ending balance in the immediately preceding periods audited Balance Sheet. 1.2 Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger. 1.3 Trace all recorded additions or credits in the General Ledger to this account to the Report of Collections and Deposits and using the approved sampling methodology, where applicable, vouch samples credited to the account to the source documents and the pertinent contract. 1.4 Trace all recorded deductions or debits in the General Ledger down to the Report of Checks Issued, or the General Journal and then to the corresponding Journal Entry Vouchers. 1.5 Examine/ vouch using an appropriate sampling methodology whenever applicable, the source documents which are the basis for credits and debits to these accounts and check whether these transactions actually occurred during the period under audit and that refunds made are: a) properly and adequately supported with documentation;

C EO

C EO

C EO RO

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

b)

the correct amount due to the contractor/ supplier/concerned party; made to the right party;

c) duly approved by authorized officials; 2.1 Confirm selected outstanding guaranty deposits by direct correspondence with suppliers / contractors particularly those with significant credit balances and debit balances. 3.1 Examine supporting documents of vouched transactions for compliance with pertinent laws rules and regulations. 4.1 Secure a list of contracts for services and construction works entered into by the agency for the current year and the immediately preceding two years. Likewise, secure list or schedule of participating bidders in all biddings conducted during the period under audit. 4.2 Examine agency file of these contracts and ascertain existence of any provision in these contracts requiring posting of a guaranty deposit or performance bond in the form of cash or retention money to guaranty performance of contractors. C EO

VR

C EO

VR

ASSERTIONFS

AUDIT PROCEDURES

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W P Re f

4.3 Examine collection reports immediately succeeding perfection of such contracts which require the posting of guaranty deposit by contractors/suppliers. Investigate and document cases of unrecorded deposits, where such deposits are required. 4.4 Examine payments made to selected contractors during the period under audit and the immediately succeeding period relative to their contract to identify any retention money deducted from their claims for which no recorded guaranty deposit had been previously recorded /credited to the account. 4.5 Review files of the Infrastructure/Property Dept. and/or contractors or suppliers files to determine any forfeiture of performance bond due to non-compliance with the agreed terms of the contracts. Check whether such forfeitures were recorded in the General Journal and the pertinent SL.

VR

4.6

4.7 Obtain a schedule of guaranty deposits payables as of end of the period under audit with information on the name of payee, amount, and nature of the payable, date received/deducted. Foot the schedule and trace the details of the schedule in the pertinent SL.

ASSERTIONFS

AUDIT PROCEDURES

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W P Re f

4.8 Check agreement of the subsidiary ledgers balances with the controlling account in the General Ledger (GL) and determine if differences between the two records represent unrecorded transactions pertaining to the account in either of these two records. 4.9 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

9. Tax Refunds Payable NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ TAX REFUNDS PAYABLE ( Account Code 429 ) Account Description: This account is used to record the estimated and actual payment of tax refunds for the year based on the special provisions of the Bureau of Internal Revenue.

Audit Objectives: 1. To determine whether all recorded outstanding Tax Refunds Payable as of balance sheet date actually represent estimated taxes refundable to taxpayers for the year pursuant to the Special Provision of the Bureau of Internal Revenue (BIR) in the General Appropriations Act 2. To ascertain that all credits to these accounts actually represent excess collection of taxes, or collection of moneys not due the taxpayer, while debits represent actual refunds to taxpayers made during the period under audit. 3. To ascertain that all applicable laws, rules and regulations were complied with in the assessment of collections and refunds of taxes. 4. To ascertain that there are no unreported tax refunds payables. 5. To ascertain whether the tax refunds payables are properly presented and classified in the trial balance/balance sheet with full disclosure of all significant matters. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1. Check whether the beginning balance of this account is the ending balance

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

immediately preceding periods audited Balance Sheet. 1.2 Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger. Trace all recorded additions or credits in the General Ledger as well as all deductions or debits to this account to the Report of Collections and Deposits and Report of Checks Issued, respectively. Then using the approved sampling methodology, where applicable, vouch samples credited and debited to this account to the source documents including the pertinent Tax Assessments or Claim/Request for Refund . 1.4 In vouching or substantiating each sample debit or credit to the account to source documents to check validity, regularity and occurrence, of the recorded additions and deductions to the account during the period, verify the following: A. For Excise Tax and Value-Added Tax (VAT) Assessment documents showing the computation of the tax refund being claimed; Certification from the concerned BIR official ( Collection Service) C EO RO C EO

1.3

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

that the taxpayer has no outstanding liability (unpaid prior years taxes); Daily Report of Collections (DRC), the report prepared by the banks authorized to receive payments for taxes, for the period covered by the tax refund. B. For Income Tax Assessment documents showing the computation of the tax refund due to the taxpayer. Certification from the concerned BIR official (Collection Service) that the taxpayer has no outstanding liability (unpaid prior years taxes). Daily Report of Collections (DRC), the report prepared by banks authorized to receive payments for taxes, for the period covered by the tax refund. C. For Refunds made during the period under audit, determine that: the refunds are properly and adequately supported with documentation; the refunded amount is the amount due to the taxpayer; refund is made to the right party; refund is duly approved by authorized officials;

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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refund is charged to the proper account VR

2.1 Secure Bureau of Internal Revenue (BIR) rules and regulations relative to tax refunds payable to ascertain how these payables are determined, computed, recognized and refunded.

2.2 Conduct interview of responsible BIR


official/s to determine whether there are excessive or erroneous collection of internal revenue taxes, including value added tax (VAT) and excise tax for the period under audit which are due for refund.

VR

2.3 Review the Journal Entry Vouchers (JEVs)


drawn for the period to ascertain that the estimated liability (tax refund) has been recognized and the proper accounts have been charged. 2.4 Secure a schedule of estimated tax refund payables due to excessive or erroneous collection of taxes with information on the name of taxpayer, Taxpayer Identification Number (TIN), address, claim control number, amount of payable and period covered. 2.5 Using that schedule, check whether the payables covered by the JEVs drawn during the period, are included in the schedule of payables.

C RO VM

C RO

C EO

2.6 Trace the accuracy of the details of the schedule to the pertinent subsidiary records Refund Control Card (RCC).

C EO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

Thereafter ascertain agreement of the SL total with the General Ledger to determine that there are no unrecorded taxes refundable or refunds made in the control account. 2.7 Obtain information on the name and address of taxpayers with material/ significant claims for refund, including their Tax Identification Number (TIN), claim control number, and amount claimed, and send them direct confirmation request re: their claims to possibly discover unrecorded claims. C EO VM

2.8 Document any unrecorded taxes refundable to taxpayers as well as any unrecorded refunds. 3.1 Determine whether the classification and presentation of Tax Refunds Payables in the Balance Sheet are in accordance with GAAP and NGAS. 3.2 Inquire from management the policies on the recognition/recording of tax refunds payables and ascertain whether these are complied with. 3.3 Check whether appropriate disclosures on the account are stated in the Notes to FS. 3.4 Take note of deficiencies, if any. Prepare and issue AOM. REVIEWED BY :

C VM VM

VR

PD

PREPARED BY :

APPROVED BY :

Date

Date

Date

8. Deferred Real Property Tax (Rpt) Income ( 451 ) Deferred Special Education Tax (Set) Income ( 452 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DEFERRED ____________________ ( Account Code ) Account Description: These accounts are reciprocal accounts to Real Property Tax (RPT) Receivables and Special Education Tax (SET) Receivables, respectively. These deferred RPT and Deferred SET accounts are credited for the tax due and debited upon collection of the tax and recognition of the income. Audit Objectives: 1. To ascertain that all recorded additions to this deferred account actually represent assessed SET and RPT during the period under audit which were debited as receivables, and that all recorded deductions to this account represent collections of previously assessed RPTs and SETs. 2. To determine whether the outstanding balance of the account as at the end of the period under audit, actually represent legitimate uncollected RPT and SET assessed and due as of balance sheet date, pursuant to NGAS policy. 3. To determine whether all RPT and SET due and demandable during the period under audit, have been completely recorded and reported as Deferred RPT Income and Deferred SET Income pursuant to NGAS policy. 4. To ascertain that Deferred RPT Income and Deferred SET Income are properly shown in the Balance Sheet. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace the beginning balance of the account Deferred RPT and SET Income to prior periods audited balance.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2

Check agreement of the balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger for Deferred RPT and SET Income.

C EO

1.3 Examine assessment documents in which additions to the account are based to ascertain that the same are due within the period under audit . 1.4 Examine also the Report of Collections and corresponding official receipts supporting debit entries to the Deferred SET and RPT accounts to ensure that they actually represent collections of RPT and SET. 2.1 Obtain a schedule of all outstanding Deferred RPT and SET Income and counter check with the corresponding RPT and SET Receivable Subsidiary Ledgers to determine if the same are still uncollected as of balance sheet date. Trace all recorded additions or credits in the General Ledger to the General Journal and then to the Journal Entry Vouchers and supporting documents.

C EO RO C EO RO

C EO RO

2.2

C EO RO C

3.1 Examine file of assessments and check if all SET and RPT assessments during the period have been recorded in the books. 3.2 Likewise, examine file of Ors representing SET and RPT collections and check for unrecorded collections.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.3 Confirm a sample of large assessments from the taxpayers to determine if there are no unrecorded payments or collections. Compare prior period assessment records with current year records to check if there are unrecorded assessments. 3.4 Check the completeness of the recording of Deferred RPT Income and Deferred SET Income by recomputing assessed RPT and SET debited as RPT Receivable and SET Receivable. 3.5 Check SET and RPT collections received after balance sheet date and determine if the same had previously been recorded as receivable and credited as Deferred SET and Deferred RPT. 4.1 Check whether the balances of these accounts are appropriately shown as Current Liabilities. Take note of deficiencies, if any. Prepare and issue AOM.

C EO VM

VM

PD

4.2

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

11. Loans Payable : Domestic and Foreign

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ LOANS PAYABLE - Domestic/Foreign ( Account Code 444 / 445 ) Account Description: This account is used to record long-term indebtedness from loans obtained in cash or in kind from domestic or foreign creditors which is evidenced by a contract or agreement. Audit Objectives: 1. To determine whether all loans payables reported as of balance sheet date are existing legitimate obligations from long term loans or financing obtained by the auditee and (a) all recorded additions (credits) to the Loans Payable account during the period under audit actually represent the incurrence of obligations for the receipt of the proceeds of long term financing/loans; and (b) all deductions (debits) to during the period under audit actually represent the retirement or payment of earlier recorded loans. 2. To determine whether a) the loans payable balance include all the outstanding loans as of balance sheet date; b) all loans obtained during the period under audit are recorded and; c) all loans paid or terminated during the period under audit have been completely recorded. 3. To ascertain whether: a) all Loans payables are duly authorized; and b) adequate compliance with the terms of the contracts (MOA) relative to the loans. 4. To ascertain whether existing Loans Payable are properly recorded and shown in the Balance Sheet in conformity with GAAP, NGAS and accounting standards set by the Philippine ASC and to determine whether the required disclosures for long term Loans Payable have been made in the Notes to FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Check agreement of the balance of the account as reported in the balance sheet with the amount recorded in the General Ledger from Loans Payable.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2

Check whether the beginning balance in this accounts GL is the ending balance in the immediately preceding periods audited balance sheet. Trace all recorded additions in the General Ledger for Loans Payable to the Report of Collections and Deposits or to the General Journal and the corresponding JEV or to the bank credit memo advising of the receipt by the bank of the proceeds of the loan, which ever is applicable. Likewise, trace all debits during the period under audit to the Report of Checks Issued or to the General Journal and the corresponding JEV. Verify payments of loans after Balance Sheet date and the recording thereof. Confirm a reasonable percentage of outstanding loans payables with creditors to strengthen conclusions on validity and existence.

C EO

1.3

C EO

1.4

C EO

1.5

C EO C EO

1.6

1.7 Reconcile amounts due and outstanding in the books from the billing statements of the creditors. 1.8 Examine/vouch using an appropriate sampling methodology, whenever applicable, the source documents which are the basis for the credits/additions as well as the for the debits/deductions to this account, to ensure that the events/transactions

C EO RO C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

which they represent occurred within the correct period under audit, and that the credits represent valid loans obtained by the auditee, while the debits represent valid retirement or payments of the recorded loans. 1.9 Document exceptions found respecting credits or debits to the account which represent transactions or events not belonging to the period under audit, or which do not represent valid loans. 2.1 Obtain or prepare schedule of all loans outstanding indicating information as to creditor, amount of loan, proceeds of the loan, date obtained, maturity date, amortization or payment scheme, interest rate, if any and guarantor, if any. 2.1 Foot schedule if obtained from the client and compare total with the General Ledger balance for Loans payable. 2.2 Trace details of the loans in the Schedule to their individual subsidiary ledgers. 2.3 Interview pertinent Treasury or Finance personnel to determine if there are unrecorded loans payable. C VM

C C EO VR

3.1 Secure copy of loan documents and examine them to determine the following: a) Authorization in the incurrence of such loans; b) Compliance with the terms and conditions of the Loan Contract; c) Compliance with the pertinent laws, rules and regulations.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.2 Trace the proceeds of the loans to the cashbooks or bank accounts to ascertain propriety of recording and safe-keeping. 4.1 Check whether the current portion of loans payable maturing within the current year are shown separately under Current Liabilities from the long-term portion thereof shown under Long-term Debt. 4.2 Determine whether the following matters have been disclosed relative to the long term portion of Loans Payable: Interest rates; Amount; Number of periodic installments and maturity dates; Nature and amount or extent of assets pledged against the debt, if any, such as (a) restrictive covenants such as those affecting retained earnings, or (b) working capital requirements; and (c) any default in principal payments, interest, or other requirements of the loan agreement.

EO RO

VM PD

PD

4.3

Inquire from management re: the existence of undisclosed commitments or contingent liabilities. Take note of deficiencies, Prepare and issue AOM. if any.

PD

4.4

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

12. Notes Payable NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ NOTES PAYABLE ( Account Code 402 ) Account Description: These represent Notes (debt instrument) issued to a single investor without intention of breaking up the debt among many investors. Their maturity, usually lasting 1 to 7 years, tends to be shorter than that of the bonds. Audit Objectives: 1. To determine whether all recorded outstanding Notes Payable as of balance sheet date actually represent existing legitimate/bona fide liabilities arising from promissory and trade acceptances issued.

2. To ascertain the authority to issue long-term notes and the propriety of interest and principal payments. 3. To ascertain the mathematical accuracy of the amount of the principal balance as well as the unamortized discount or premium as of balance sheet date and all promissory notes and acceptance issued have been correctly recorded. 4. To ascertain whether the Notes Payables and related unamortized discount or premium accounts, and interest payable are properly identified and classified in the balance sheet and to assess whether required disclosures have been made in the balance sheet or the notes to financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Check agreement of balance of the account as reported in the Balance Sheet with the amount recorded in the General Ledger.

C EO

1.2 Trace

the beginning balance of this account in the General Ledger to the immediately preceding periods audited balance.

C EO

1.3 Trace all recorded additions or credits in the General Ledger as well as all deductions or debits to this account to the Report of Collections and Deposits and Report of Checks Issued, respectively. Then using the approved sampling methodology, vouch samples, credited and debited to this account to the source documents including the pertinent promissory notes . 1.4 Verify payments made on the notes through inspection of paid checks, examination of vouchers, and examination of related accounting records and entries.

C EO RO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.5 Request confirmation of note terms and balances from the holders of outstanding notes. 2.1 If it is an initial engagement, examine the auditee charter, code of regulations, and minutes of meetings of the Board of Directors to determine that the authority to issue long-term notes is proper. Prepare summary /brief of the significant provisions contained in the mentioned documents and file it in the permanent-file work papers for future reference. 2.2 In succeeding audits, examine the minutes of Board meetings, and note issues and retirements initiated during the year under audit.

C EO VR

C EO VR C VM

3.1 Recompute interest expense and amortization/payment. Verify interest payments made by tracing paid checks for interest as well as interest receipts through the cash disbursements records to each specific note. Verify also the interest accrued from the last interest payment date to the end of the period.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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3.2 Prepare or obtain a schedule of notes payable containing the following: a. Description date of issue, type, maturity, face amount, interest rate, timing and amount of payment;

b. Principal - balance beginning of year, additions, payments and balance year end; c. Interest accrual beginning of year, unamortized premium/discount beginning of year, expenses during the year, accrual year end, unamortized premium/discount, year-end 3.3 Foot and cross-foot schedule and check agreement with Subsidiary Ledger and thereafter check agreement of SL total with the General Ledger. 3.4 Confirm outstanding balances with the creditor to determine accuracy of recorded balance and of any unrecorded promissory notes or payments thereof. C

C EO RO

3.5 Review related debt contracts to obtain data relevant to the purchase price of any assets secured by the issuance of the notes, installment payments, interest rates, and other terms of the obligations. 3.6 Review subsequent payments and renewals and check whether the same have been recorded.

VR

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.7

Examine cancelled notes and check whether the same have been debited / recorded.

3.8 Examine / inspect proper cancellation of notes paid in full. 3.9 Test cut - off. Examine near year-end. transactions

C PD

4.1 Determine whether the classification and presentation of Notes Payables in the Balance Sheet are in accordance with GAAP, NGAS and the accounting standards set by the Philippine ASC. 4.2 Inquire from the auditee on the existence of undisclosed commitments for appropriate disclosure.

PD

4.3 Check the appropriateness/adequacy of other necessary disclosures pertaining to the account. 4.4 Vouch subsequent events by examining pertinet documents to determine necessity for disclosure of significant information. 4.5 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

13. Bonds Payable : Domestic / Foreign NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ BONDS PAYABLE Domestic/Foreign ( Account Code 442 / 443 ) Account Description : These can result from a single agreement but a bond may be broken up into various sub-units, typically of equal amounts each, which are issued to a variety of investors. Audit Objectives: 1. To ascertain: a) the authority to issue bonds; and b) that all significant provisions of a bond trust indenture are being fulfilled by the auditee. 2. To ascertain that all recorded bonds payable represent legal obligations of the auditee arising from the issuance of bonds during the period under audit and to determine the propriety of interest and principal payments under the bond issue.

3. To ascertain that the recorded bonds payable are existing as of the balance sheet date. 4. To ascertain that the correct amount of principal balance as well as of the unamortized discount or premium has been recorded as of balance sheet date . 5. To ascertain that there are no unrecorded Bonds Payable as of statement date. 6. To ascertain whether the bonds payable and related unamortized discount or premium accounts interest payable are properly identified and classified in the balance sheet and to assess whether required disclosures have been made in the balance sheet or the notes to financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 In an initial engagement with the auditee,


a) examine the auditee charter, code of regulations, and minutes of meetings of the Board of Directors to determine that there is legal authority to issue bonds.

VR

b) examine the trust indenture for each bond to determine the purpose of the bond, and examine also all the salient provisions of the agreement. Prepare summary/ brief of the significant provisions contained in the mentioned documents and file it in the permanent-file work papers for future reference.

1.2 In succeeding audits, examine the minutes


of Board meetings regarding bond issues and retirements approved during the year under audit.

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Examine copies of bond agreements and check whether they are in accordance with the approved Board Resolution. 1.4 Vouch proceeds of bonds issued. Where bonds are issued for cash, determine the cash proceeds from bonds and trace them to the Cash Receipts records, Cash ledger account, and bank deposit slips, credit or remittance advices and bank statements. If property other than cash has been obtained, investigate the value of the property taken in exchange.

VR

C EO RO

1.5 Where a bond issue involves a mortgage of a certain auditee property specified by the bond indenture, determine that the mortgage has been properly recorded by the appropriate governmental agency such as the Registry of Deeds. It may be

EO VR

necessary to inspect maintained in that office.

the

records

1.6 Verify if the mortgaged property is adequately insured and that all requirements placed on the mortgagor with respect to insurance, maintenance, and taxes are being fulfilled.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.7

If the trustees have destroyed the cancelled bonds, obtain a certification of cancellation. Ascertain that all coupons that have been redeemed and all unmatured coupons on bonds cancelled before maturity have been cancelled or destroyed.

2.1 Examine copies of recorded outstanding Bonds.

C EO C EO RO C EO C VM

2.2 Confirm a reasonable percentage of outstanding bonds with bond holder. 2.3 When bonds have been redeemed, verify if they are properly cancelled through inspection of the subject bonds.

3.1 Ascertain the bonds outstanding at the beginning of the period, add the bond issued during the period and relate to proceeds, and deduct bond retirements and relate to disbursements to arrive at bonds outstanding at the end of the period. 3.2 Verify interest payments made by tracing paid checks for interest as well as interest receipts through the cash disbursements records to each specific bond. Verify also the interest accrued from the last interest payment date to the end of the period.

VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

4.1

Prepare or obtain a Bond Schedule for each bond issue which contains, among others, the detailed breakdown of bond carrying value, unamortized discount or premium, effective interest, and amortization.

4.2 Reconcile totals on the schedule with the respective ledger accounts for bonds payable, bonds carrying values, unamortized discounts or premiums, and interest expense. 4.3 When a trustee is employed, obtain a confirmation of the number of bonds issued, outstanding and unissued; amount of any matured bonds and pastdue interest; amount of any cash held for redemption of unpaid coupons; securities or collaterals held; amount of any cash in sinking fund to provided for retirement of bonds; and any defaults in the clients compliance with terms of the indenture.

C EO RO VM

4.4 Compare results of the confirmation made with the bonds schedule. Investigate / verify discrepancies noted. 5.1 Obtain periodic trustee reports and use these to further verify/analyze bond transactions

C EO RO C EO RO C EO RO

5.2 If the auditee did not use a trustee, and the bonds were sold by the issuing company directly to the bondholders, review company records.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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5.3 Test cut-off. Examine transactions near year-end. 6.1 Compare statement presentation and disclosures with those required by GAAP, NGAS, and accounting standards set by the Philippine ASC.

C EO PD

6.3 Vouch subsequent events by examining pertinent documents to determine necessity for disclosure of significant information. 6.4 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

14. Mortgage Payable

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ MORTGAGE PAYABLE ( Account Code 441 ) Account Description: This account is used to record long-term indebtedness covered by a contract and secured by a collateral to guarantee payment. These are amounts received in exchange of the collateral. Audit Objectives: 1. To ascertain that all recorded mortgage payables as of balance sheet date represent legitimate mortgages made by the auditee and all additions and deductions to the account occurred during the period under audit and to ascertain the authority to mortgage. 2. To ascertain that all transactions affecting Mortgage Payable are accurately and completely recorded. 3. To ascertain whether the mortgage account and related interest payable account are properly identified and classified in the balance sheet and to assess whether all the required disclosures have been made in the balance sheet or the notes to financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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VR 1.1 In an initial engagement, examine the auditee charter, code of regulations, and minutes of meetings of their Board if Directors to determine that there is authority to mortgage. 1.2 Vouch proceeds for mortgage issuance to the credit of the mortgage accounts. Trace cash receipts to bank C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

deposit slips, credit advices and bank statements, as well as to the cash receipts records and ledger. If property other than cash has been obtained, examine the purchase contracts for the acquired assets. 1.3 Examine all mortgage contract agreements and documents to determine the purpose of each mortgage. Briefs of the significant provisions contained in the mentioned documents should be filed in the pertinent file working papers for future reference. 1.4 In the succeeding audits, examine the minutes and mortgages contracts initiated during the year under audit, including any renegotiation of previous contracts. Verify if the mortgage property is adequately insured and that all requirements placed on the mortgagor with respect to insurance, maintenance, and taxes are being fulfilled. Vouch principal payments. Verify charges/debits to mortgage accounts by examining cash disbursement records, paid checks and confirmations from the mortgagee. Examine also notations on the mortgage notes for principal payments. If a mortage has been paid, examine returned notes or equivalent VR

C EO VR RO VR

1.5

1.6

C EO RO

1.7

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

document indicating full receipt of payment. 1.8 Confirm mortgage cancellation by verifying/examining the cancellation recorded in the records of the Registry of Deeds or equivalent office/agency. C VR

1.9 Verify interest payment made by tracing paid checks for interest as well as interest receipts through the cash disbursements records to each specific mortgage. Verify also the interest accrued from the last interest payment date to the end of the period. 2.1 Check whether the beginning balance of this account is the ending balance in the immediately preceding periods audited Balance Sheet. Trace the beginning balance of this account in the General Ledger to the immediately preceding periods audited balance. Prepare or obtain Mortgage Schedule. Compare each mortgage payable with the subsidiary records. Reconcile the total of the subsidiary balances with the balance of the controlling account. Confirm mortgages and interest from the mortgagee by sending confirmation letters requesting among others the amount of the

C VM

EO

2.2

C EO

2.3 2.4

C C EO

2.5

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

mortgage, interest rate, interest dates, maturity dates, payment arrangements, principal and interest payments during the period, and the mortgage balance due. 2.6 Compare results of the confirmation made with the mortgage schedule. Investigate/verify discrepancies noted. 2.7 Test cut-off. Examine transactions near year-end. 3.1 Compare statement presentation and disclosures with those required by GAAP, NGAS, and accounting standards set by the Philippine ASC. 3.1 3.2 Inquire from the auditee on the existence of undisclosed commitments. Vouch subsequent events by examining pertinent documents to determine necessity for disclosure of significant information. C

C PD

PD PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date Date B.8.2 Audit Programs for Equity Accounts 1. Capital Stock NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CAPITAL STOCK

Date

( Account Code 502 ) Account Description : Capital stock represents investments by owners to the extent of the par or stated value of capital stock. Capital stock may be in the form of common stock or preferred stock. Audit Objectives: 1. To ascertain the existence of the reported capital stock as of balance sheet date. 2. To ascertain that all transactions regarding capital properly recorded in the books. 3. stock during the period were

To ascertain that capital stock is properly valued as of balance sheet date.

4. To determine that the transactions affecting capital stock are in accordance with the existing laws, rules and regulations. 5. To ascertain that there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Confirm number of shares and amounts per schedule with the transfer agent/registrar/agent/ subscriber; 1.2 Check the agreement of confirmation replies with recorded balances in the books;

C EO RO C EO RO EO VR C EO

1.3 Test check shares issued against stubs in the stock certificate book; 1.4 Examine documentary stamps affixed; 1.5 Confirm unpaid subscriptions;

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.6 Inspect and account for all unissued and cancelled stock certificate to determine that they are actually on hand and blank; 1.5 Examine retired shares for evidence of cancellation and count treasury stocks on hand; 2.1 Verify additions to capital stock account; 2.2 Trace proceeds to cash receipts records/ledger and vouch to underlying supporting documents; 2.3 Trace payments retirements/withdrawals disbursements records checks; for capital to cash and cancelled

C EO RO C EO C

2.4 Determine if schedule on capital stock and working paper ending balance agree with the general ledger balance; 3.1 Obtain/prepare a schedule of the capital stock indicating the number of shares and amounts authorized, subscribed, issued, paid-in for the beginning of year balances; 3.2 Trace beginning balance to last years working papers; 3.3 Check clerical accuracy of the schedule, if furnished by management; 3.4 Test dividend computation by reference to the minutes of board of directors meeting for dividend rate, record date and the number of shares; 3.5 Examine stockholders ledger to determine proper posting of dividend;

C EO C C RO VM C VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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4.1

Study the governments requirements for incorporation procedures, qualification of securities, issuance of capital stock, requirements for the recording of values received, stockholders records which must be maintained, requirements of minimum original paid-in capital, and other requirements of the state;

VR

4.2 Obtain a copy of the corporate charter, articles of incorporation and by-laws. a. Determine for each class of stock the authorized capital stock and determine whether the agency has complied with the minimum capital requirement; 4.3 Determine the par value, preferences/limitations, features, policies and activities concerning capital stock; Ascertain that the account is adequately disclosed in the notes to financial statements and check that it is properly presented in the balance sheet.

C EO VR

VR

5.1

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

2. Retained Earnings NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

RETAINED EARNINGS ( Account Code 510 ) Account Description : Retained earnings represent capital arising from the operations of the enterprise. It is generally sub-classified into appropriated retained earnings and unappropriated retained earnings. Assertions: Existence or occurrence, completeness, regularity and , presentation and disclosure, rights and obligations, valuation or measurement. Audit Objectives: 1. To ascertain the existence of the reported retained earnings as of balance sheet date. 2. To ascertain that all transactions regarding retained earnings during the period were properly recorded in the books. 3. To determine that the transactions affecting retained earnings are in accordance with the existing laws, rules and regulations. 4. To ascertain that there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1 Prepare or obtain schedule of retained earnings indicating the beginning balance, additions and deductions for the current year and ending balance. 1.2 Prove mathematical schedule. accuracy of the

C EO

1.3 Examine the entries in the retained earnings account for enough prior periods to establish the propriety of the beginning balance.

C EO VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1 Vouch each debit and credit entries by tracing the transaction to the record of original entry and by examining all supporting evidence. 2.2 Ascertain the reasons, propriety, mathematical correctness, and proper method of recording.

C EO RO C

2..3

Review Income and Expense Summary account and closing entry to Retained Earnings. Determine correctness of the amount. 2.3 Determine that all items of income and expense recognized in a period are included in the determination of income/loss for the period; 2.5 3.1 Verify income/loss from ordinary and extraordinary activities; Check whether dividend declarations and retained earnings appropriations, charges to retained earnings account are properly supported by recorded actions of the board of directors.

C EO

VM C VR RO

4.1 Ascertain that the account is adequately disclosed in the notes to financial statements and is properly presented in the balance sheet PREPARED BY : Date 3. Surplus Reserve REVIEWED BY : Date

PD

APPROVED BY : Date

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

SURPLUS RESERVE ( Account Code ) Account Description: The board of directors has the power to set aside for a special purpose part of the surplus profits available for dividends. This is called the restriction or appropriation of earned surplus. The restriction of earned surplus so that it may not be declared as dividend, is done usually in anticipation of future projects or contingencies. Such amounts restricted are called surplus reserves. Audit Objectives: 1. To ascertain the existence of the reported surplus reserve as of balance sheet date. 2. To ascertain that all transactions regarding surplus reserve during the period were properly recorded in the books. 3. To determine that the transactions affecting surplus reserve are in accordance with the existing laws, rules and regulations. 4. To ascertain that there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1

Prepare or Obtain schedule of surplus reserve indicating the beginning balance, additions and deductions for the current year and ending balance. Prove mathematical accuracy of the schedule. Vouch each debit and credit entries by tracing the transaction to the record of original entry and by examining all supporting evidence.

C EO

1.2

1.3

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.4 Examine the entries in the surplus reserve account for enough prior periods to establish the propriety of the beginning balance. 2.1 Review the minutes of the Board of Directors/ Stockholders meeting and/or law pertaining to surplus and determine legality for creating the account; 3.1 Ascertain that the account is adequately disclosed in the notes to financial statements and is properly presented in the balance sheet.

C EO

VR

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

4. Invested Surplus

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INVESTED SURPLUS ( Account Code ) Account Description : This account reflects the equity of the national and local governments in long-term investments and fixed assets. A credit balance in this account represents the excess of the cost or other value of long-term investments and fixed assets over long term liabilities. Audit Objectives: 1. To ascertain the existence of the reported invested surplus as of balance sheet date. 2. To ascertain that all transactions regarding invested surplus during the period were properly recorded in the books. 3. To ascertain that invested surplus is properly valued as of balance sheet date. 4. To determine that the transactions affecting invested surplus are in accordance with the existing laws, rules and regulations. 5. To ascertain that there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

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1.1

Prepare or obtain schedule of invested surplus indicating the beginning balance, additions and deductions for the current year and ending balance. accuracy of the

1.2 Prove mathematical schedule.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1

Vouch each debit and credit entries by tracing the transaction to the record of original entry and by examining all supporting evidence. Review the valuations assigned to the investment for reasonableness and propriety.

C EO RO VM

3.1

4.1 Review the minutes of the Board of Directors/ Stockholders meeting and/or law pertaining to invested surplus and determine legality for creating the account. 4.2 4.3 Ascertain approval of investment by proper officials. Ascertain that the account is adequately disclosed in the notes to financial statements and is properly presented in the balance sheet.

EO VR

VR PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

5. Appraisal Surplus NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ APPRAISAL SURPLUS ( Account Code ) Account Description: This account is used to record the increase in the appraised value of fixed assets. Assertions: Existence or occurrence, completeness, valuation, regularity and presentation and disclosure Audit Objectives: 1. To ascertain the existence of the reported appraisal surplus as of balance sheet date. 2. To ascertain that all transactions regarding appraisal surplus during the period were properly recorded in the books. 3. To ascertain that appraisal surplus is properly valued as of balance sheet date. 4. To determine that the transactions affecting appraisal surplus are in accordance with the existing laws, rules and regulations. 5. To ascertain that there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Prepare or obtain schedule of appraisal surplus indicating the beginning balance, additions and deductions for the current year and ending balance. Prove mathematical accuracy of the schedule.

1.2

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 2.1

Check the appraisal report undertaken by an independent appraiser. Vouch each debit and credit entries by tracing the transaction to the record of original entry and by examining all supporting evidence. Review the valuations assigned to the property, if other than cost, for reasonableness and propriety. Use the independent appraisers report as guide in determining the reasonableness of the valuation. Review the basis of the appraisal by referring to agency and generally accepted appraisal policies. Determine agency compliance to said policies like frequency of appraisal, items subject to appraisal, and appraisal procedures.

VR C EO

3.1

VM

3.2

VM

4.1

VM

4.2

VR VM

4.3 Verify whether the appraisal made was properly documented and approved by proper officials. 5.1 Ascertain that the account is adequately disclosed in the notes to financial statements and is properly presented in the balance sheet. PREPARED BY : Date 6. Donated Capital/Surplus REVIEWED BY : Date

VR

PD

APPROVED BY : Date

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DONATED CAPITAL / SURPLUS ( Account Code ) Account Description: This account is used to record capital/surplus, either in cash or property, contributed or donated by persons other than stockholders and creditors. Audit Objectives: 1. 2. 3. 4. 5. To ascertain the existence of the reported donated capital/ surplus as of balance sheet date. To ascertain that all transactions regarding donated capital/ surplus during the period were properly recorded in the books. To ascertain that donated capital/surplus is properly valued as of balance sheet date. To determine that the transactions affecting donated capital/surplus are in accordance with the existing laws, rules and regulations. To ascertain that there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Examine Transfer Certificate of Title, Certificate of Capital Gains, tax declaration, official receipts and other pertinent documents to check the agencys legal ownership over the properties;

C EO VR RO

1.2 Check/inspect the property Deed of Donation;

stated in the

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1 Obtain copy of account details /subsidiary records of donated surplus from management. 2.2 Trace beginning balance to last years working papers. 2.3 Vouch each debit and credit entries by tracing the transaction to the record of original entry and by examining all supporting evidence. Ascertain the reasons, propriety, mathematical correctness, and proper method of recording. Review the valuation assigned to the property for reasonableness and propriety.

C EO C EO

2.4

3.1

VM

3.2 Ascertain approval of valuation by proper officials. 4.1 Review the legal bases of the donation and other related provisions of law. 4.2 Verify receipt of donation from the Advice of Allotment and Notice of Cash Allocations and/or Memorandum of Agreement.

VR VR C EO RO VR

4.3 Verify whether the Memorandum of Agreement and Deed of Donations were made and entered into by proper officials and their authorized representatives.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

4.4

Examine terms and conditions for the release of subsidy/deed of donation for limitations or conditions. To ascertain that there is adequate disclosure in the notes to financial statements and proper presentation in the balance sheet.

VR

5.1

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

7. Government Equity Account NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ GOVERNMENT EQUITY ( Account Code 501 ) Account Description: This account represents the difference between the assets and liabilities of national government agencies. Audit Objectives: 1. To ascertain that all closing entries to Government Equity account are valid and proper and in accordance with NGAS. 2. To determine whether all transactions pertaining to Government Equity are completely recorded in the books. 3. To determine whether the balance of Government Equity Account is properly presented in the Balance Sheet and adequately disclosed in the notes to financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Prepare or obtain schedule of government equity account indicating the beginning balance, additions and deductions for the current year and ending balance. 1.2 Prove mathematical schedule. accuracy of the

C EO

C C

1.3 Verify debits and credits entries in the journal voucher.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.4. Check whether transactions affecting Government Equity are proper and in accordance with NGAS. 2.1 Trace beginning balance to prior years working papers and verify discrepancies, if any. 2.2 Verify whether all transactions affecting government equity accounts are recorded in the books. 2.3 Check mathematical accuracy of amounts recorded in the books. Verify discrepancies. 2.5 Verify whether the amount of Government Equity in the Balance Sheet tallies with the Statement of Government Equity. Note differences/discrepancies, if any.

C VR PD C EO C

3.1 Check whether Government Equity Account is properly classified and presented in the Balance Sheet and adequately disclosed in the notes to financial statements.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

8. Cost of Goods Sold NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ COST OF GOODS SOLD ( Account Code 511 ) Account Description: This account is used to record the cost of goods or merchandise sold in the course of business operation of government agency such as drugs and medicines, supplies and materials, accountable forms with face value, etc. Audit Objectives: 1. To ascertain that all transactions affecting Cost of Goods Sold account are properly accounted for in the books. 2. To ascertain that all transactions of the account are closed to Income and Expense Summary account in accordance with NGAS. 3. To ascertain that the account is properly presented in the Balance Sheet and is adequately disclosed in the notes to financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace entries affecting Cost of Goods Sold account reflected in the JEVs to General Journal, General Ledger and Statement of Income and expenses. Check if properly coded and classified; 1.2 Check mathematical accuracy of amounts recorded/reflected in the books of accounts and Statement of income and Expenses. 1.3 Verify discrepancies, if any;

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1

Check whether the Debit Balance at the end of the year is closed to Income and Expense Summary account in accordance with NGAS.

C PD

2.2 Check whether the Cost of Good Sold is properly classified and presented in the Balance Sheet and is adequately disclosed in the notes to financial statements. 2.3 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

9. Retained Operating Surplus Year 1 to year 3 (513 to 515)

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ COST OF GOODS SOLD ( Account Code 511 ) Account Description: This account represents the net results of agency operation from year 1 to year 3 Audit Objectives: 1. To ascertain that all Prior Years adjustments to Retained Operating Surplus are valid and proper and the Balance of Retained Operating Surplus are closed to Government Equity Account in accordance with NGAS. 2. To determine whether closing entries are taken up in the books of accounts. 3. To determine whether balance of Retained Operating Surplus is properly presented and classified in the Balance Sheet and is adequately disclosed in the notes to financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Valuation or Measurement ( VM ) , Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Check whether Income and Expense Summary Account and Cost of Goods Sold are properly closed to Retained Operating Surplus (Year 1) account 513 in accordance with NGAS. Verify whether preceding years adjustments to Retained Operating Surplus (Year 2) Account 514 are valid and proper.

C PD

1.2

C PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Verify whether next preceding years adjustments to Retained Operating Surplus (Year 3) Account 515 are valid and proper. 2.1 Trace the closing entries in the JEV to General Journal and General Ledger; 2.2 Check mathematical accuracy of amounts recorded in the books. Verify differences/discrepancies; 2.3 Check whether Retained Operating Surplus (Year 1, Year 2 and Year 3) are completely closed to Government Equity Account and trace closing entry to the Books of Accounts; 3.1 Check whether Retained Operating Surplus Account is properly classified and presented in the Balance Sheet and adequately disclosed in the notes to financial statements.

C C

C PD

VM PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

10. Income and Expense Summary

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INCOME AND EXPENSE SUMMARY ( Account Code 512 ) Account Description: This account is used as a summary account for all subsidies received, revenues earned and expenses incurred during the year. Audit Objectives: 1. To ascertain that all income, expenses, cost of goods sold, subsidy income from National Government (NG)/Central Office (CO)/Regional Office (RO) /Staff Bureaus, and subsidy to RO/Staff Bureaus/Operating Units for the calendar year are closed to Income and Expense Summary Account and the later account is closed to Retained Operating Surplus Account, in accordance with the NGAS. 2. To ascertain that the above-mentioned closing entries are recorded in the books of accounts. 3. To determine whether the balance of Income and Expense Summary is properly presented in the Balance Sheet and adequately disclosed in the notes to financial statements. Assertions: Completeness ( C ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Check whether all income, expenses Cost of Goods Sold, etc., are closed to Income and Expense Summary Account.

1.2

Trace closing entries in the JEVs to General Journal to General Ledger.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Check mathematical accuracy of amounts recorded in the books. Verify differences/discrepancies. 2.1 Verify whether the closing entry is completely taken up in the Books of Accounts. Check whether Income and Expense Summary Account is properly classified and presented in the Balance Sheet and adequately disclosed in the notes to financial statements.

3.1

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY : Date

Date Date B.9.2 Audit Programs for Different Revenue Accounts 1. INCOME NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INCOME ( Account Code

Account Description: This account is used to record all types of revenues generated by the government in the exercise of its administrative and regulatory functions. It is also used by government agencies to record revenues generated from business operations. Audit Objectives:

1. To determine whether all recorded and reported income as of balance sheet date represent total collections from payees during the period under audit and are properly valued and are properly authorized. 2. To ascertain that all amounts debited and credited to income during the period under audit represent transactions and events which actually occurred is promptly and correctly assessed, billed and collected in full when due and that the account balance is correct.

3. To determine whether the income as at the end of the period has been properly presented and adequately disclosed in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Check agreement of the balance of the account as reported in the Income Statement with the amount recorded in the General Ledger for Income. 1.2 Review the GL entries. Verify the correctness of postings in the GL by tracing entries to the Cash Receipts Journal (CRJ), Cash Journal (CJ) and the General Journal (GJ) to the underlying Journal Entry Vouchers (JEV). 1.3 Analyze income account for propriety of credits. 1.4 Trace income entries in the JEVs to the underlying Report of Collections and Deposits (RCD). 1.5 Verify whether credits to income account are proper and that the account classification is correct and consistently followed.

C EO

C EO RO

C EO C EO RO VM PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.5 From the RCD, select audit samples based on approved sampling methodology. For every sample, examine supporting documents or other basis for credits to income for: 2.3 2.4 Regularity/validity legal basis/authorization accuracy proper account classification

C EO VR RO PD

Inquire into the basis or criterion in giving discounts or exemptions, if any. From the books of accounts, prepare a schedule by months of all types of income recorded during the audit period. Foot the schedule and compare totals with the GL balances. Check to see whether proper cut-off for income realized has been observed. Review transactions for a few days before and after the end of the accounting period under audit. Check whether earned income for the period have been accrued and recorded in the books. Examine any charges/adjustments made to the accounts. See that they are proper and duly authorized. Determine that income already due is being assessed or billed

VR C EO

2.5 2.6

C VM C VM C VM VR VM C EO

2.7

2.8

2.1

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.2

Review assessment and billing source records for completeness of data and accuracy of rates. See that bills are pre-numbered or numbered in sequence and that cancelled bills are properly accounted for. Trace assessment/bills to Summary of Bills Rendered or equivalent record. See that bills are accounted for, and are recorded in sequence and in the correct amount. Review procedures and mathematical process for arriving at the amount of assessment/billing.

C EO C

2.3

2.4

2.5

2.6 See that paid assessments/bills are segregated from unpaid ones. Trace paid assessments/bills to Cash Receipts Journal / Cash Journal. Note dates of Journal/Cash Journal. Note dates of collection and compare with due dates of the assessments/bills. 2.7 Check assessments/bills against collection records. Investigate those that remain uncollected 2.8 Inquire into causes of overdue assessments, bills and collections, if any. Investigate follow-up collection efforts. Check whether procedures for collection of unpaid bills are in place to immediately follow-up overdue bills.

C EO

EO RO RO

2.9

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.10

Discuss with responsible officials the collection possibilities of overdue accounts. See that income is properly presented in the financial statements in accordance with generally accepted accounting principles. Inquire into assessments and bills under litigation. See that adequate disclosures concerning income have been made in the financial statements. Note and document exceptions, if any. Prepare and issue AOM.

RO

3.1

PD

3.2 3.3

RO PD

3.4

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

2. HOSPITAL FEES, MEDICAL & LABORATORY FEES NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ HOSPITAL FEES, MEDICAL and LABORATORY FEES ( Account Code ) Account Description: This account represents regular charges by hospital for services rendered to patients including medical and laboratory fees. Audit Objectives:

1. To ascertain that all hospital, medical and laboratory fees have been promptly and correctly assessed, billed and collected in full when due and that the account balance is correct and properly valued and authorized. 2. To determine that income for the period has been properly presented and adequately disclosed in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosures ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace the FS balance to the general ledger (GL) to the Subsidiary Ledger (SL) entries. Review the GL entries. Verify correctness of posting in the GL by tracing entries to the Cash Receipts Journal (CRJ), Cash Journal (CJ) and General Journal (GJ) to the underlying Journal Entry Vouchers (JEVs). Analyze income account for propriety of credits. Trace income entries in the JEVs to the underlying Report of Collections and Deposits (RCD). Verify whether credits to income and charges to other accounts are proper and that account classification is correct and consistently followed. Obtain List of Monthly Report of Discharged Patients. From the list, select samples based on approved Sampling Techniques.

C EO C EO RO

1.2

1.3 1.4

C EO C EO RO VM

1.5

1.6

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.7

Obtain the patient jackets of the selected samples from the Billing Section containing the patients bill, statement of accounts, charge slips, admission slip/form and notice of discharge. Review/Examine bills rendered or the assessment made together with other supporting documents contained in the patients jacket for regularity and accuracy of charges made. discounts

1.8

C EO VR RO C RO

1.9 Verify the appropriateness of granted, if any, for: applicants

Senior citizen Government employee Social service qualified C

1.10 See to it that deposits of in-patients are properly closed to income upon discharge of the patient. 1.11 Examine charges/adjustments made to the accounts. See that these are proper and duly authorized. 1.12 Check whether proper cut-off for income realized has been observed. 1.13 Review transactions for a few days before and after the end of the accounting period under audit. 1.14 Check whether earned income for the period have been accrued and recorded in the books.

C VR VM C VM C VM C VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.1 Check the propriety of the presentation of the account in the financial statements. 2.2 Check whether adequate disclosure concerning the accounting method of recording income has been made. Note and document exceptions, if any. Prepare and issue AOM.

PD PD

2.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

3. INTEREST INCOME NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INTEREST INCOME ( Account Code 664 )

Account Description: The account is used to record all interest earned on Deposits with Banks, Loans and Investments on Bonds, Treasury Notes, Treasury Bills and Promissory Notes held.

Audit Objectives: 1. To ascertain that all interest income for the period has been accurately recorded and properly valued and authorized. 2. To determine that all income have been actually received in full when due. 3. To determine that income for the period has been properly presented and adequately disclosed in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the FS balance to the general ledger (GL) to the subsidiary ledgers (SL) 1.2 Verify the correctness of postings in the GL/SL from the pertinent journals. 1.3 Check correctness of entries in the JEV from the Report of Collections and Deposits (RCD) and other source documents.

C EO C C EO

1.4 Analyze the interest income account for propriety of credits. 1.5 Review the GL account. Trace entries in the account through the journals to the underlying Report of Collections and Deposits or other pertinent reports.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.6 Verify accrued interest at the end of the period and ascertain that the proper entries were made for the accrual. 1.7 Verify whether credits to income account are proper and that account classification is correct and consistently followed. 2.1 Trace dividends and interest received to the cash receipts record. Ascertain that those already earned and due but not yet received have been properly recorded in the accounts, where applicable. Confirm unpaid dividends and interests, if any. Compute the correct amount of dividends and interest income earned during the period.

C VM VM PD C EO VM

2.2

C VM C EO VM PD

2.3 Compare the interest collections scheduled to be received with those recorded in the cash receipts records. Trace the difference between the amount collected and the interest income account balance to the

accrued interest receivable. The interest earned for the period should agree with the balance of the Interest Income account. 2.4 Canvass from at least three reputable financial institutions the prevailing market rates for each type of investment. Select the most advantageous rate as the target rate of return. VR VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.5

Calculate the estimated investment revenue: (Total Invested Fund x Target Rate of Return divided by 360) x No. of days in investment = Estimated Revenue.

VM

2.6 Calculate the annual rate of return for the last three years in the investment. See and quantify the difference. Assess cause(s) of difference, if any. 2.7 Prepare a schedule of direct expenses related to investment program such as management fees, consultancy fees, commission, etc., if any. Ascertain the causes of significant fluctuations in the trend of investment expenses for the last three years of the program. See that income is properly presented in the financial statements in accordance with generally accepted accounting principles. See that adequate disclosures concerning investment income have been made in the Financial Statements.

VM

2.8

VM

3.1

PD

3.2

PD

3.3 Note and document exceptions, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

4. AMUSEMENT TAX NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ AMUSEMENT TAX ( Account Code 581 ) Account Description: This Account is used to record taxes imposed on gross receipts from admission fees collected by the proprietors, lessees or operators of theaters, cinemas, concert halls, circuses, boxing stadium and other places of amusement. Audit Objectives: 1. To ascertain that all amusement taxes have been accurately recorded and properly classified in the account and that account balance is accurate. 2. To determine whether amusement taxes so collected are generated from sources expressly authorized by law rules and regulations and that rules and regulations policies and procedures contribute to the realization of the goals or target through efficient and economical means. 3. To determine whether amusement taxes collected are properly assessed, collected, receipted, accounted for and remitted promptly. 4. To determine that amusement tax were properly presented and adequately disclosed in the financial statement.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the FS balance to the general ledger (GL). 1.2 Verify the correctness of postings in the GL from the Cash Receipts Journal, Cash Journal and the General Journal. Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the Report of Collections and Deposits and the source documents.

C EO C EO

1.3

1.4

C EO C EO C

1.5 Analyze income account for propriety of credits. 1.6 Review the general ledger account. Trace entries in the account through the journals to the underlying Report of Collections and Deposits (RCD). Verify the correctness of vertical and horizontal footings of the RCD by running an independent tape.

1.7

1.8 Trace transcription of the data from the official receipt to the RCD. 1.9 Trace column totals of the RCD to the entries in the Cash Receipts Journal/Cash Journal.

C C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.10 Foot the Cash Receipts Journal/Cash Journal and trace to the postings in the general ledger. 1.11 Verify or confirm with the bank/Bureau of Treasury the amounts appearing on Remittance Advices as having been deposited with authorized depository bank/Bureau of Treasury. 1.12 On sample basis, and whenever possible, confirm with payees and determine correct amount paid. 1.13 From the books of accounts, prepare a schedule by months of all types of income recorded during the audit period. Foot the schedule and compare the total with the general ledger. Compare the schedule with the earnings of similar past periods. Check to see that all types of income due are being recorded. Investigate wide fluctuations between months and years. Watch for any exceptional items or those that are recurrent but not booked up. Check to see whether proper cut-off for income realized has been observed. Review transactions for a few days before and after the end of the accounting period under audit.

C EO RO

C EO RO C

1.14

1.15

1.16

1.17

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.18

Check whether earned income for the period have been accrued and recorded in the books. Examine any charges/adjustments made to the accounts. See that they are proper and duly authorized. Examine whether credits to income account are proper and that the account classification is correct and consistently followed.

1.19

VR VM

2.1

VM PD

2.2 Examine supporting documents or other basis for credits to income for: 2.3 regularity authorization accuracy proper account classification Review assessment/bills rendered / collection records to determine if tax laws, ordinances, regulations, etc. are being applied uniformly and in similar situations as to: rates computation manner of payment penalties, if applicable

C EO VR RO PD

C VR VM

2.4 Inquire into the basis or criterion in giving discounts or exemptions, if any, and its effect on income target.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.5 Compare income realized against target/ projections for the period. Analyze trend over several years. Quantify differences. 2.6 Determine causes of shortfalls in income generation. 2.7 Check if increased income was caused by: 2.8 higher rates of income more efficient system or effort by management understated estimate/projection of income

VM

Look into the agencys method or basis of estimating income and see that it is reasonable and attainable. Check if the agency provides for a mechanism to establish and control the cost of realizing or collecting income and compare and analyze the cost per peso of income generated/collected to determine efficiency in operation. Total cost of income generation Cost per peso Total income of income realized =

VM

2.9

VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.10 Discuss with management the possibility of increasing income thru improved assessment/ billing/collection procedures or by correcting negative practices and other factors that prevent the attainment of income targets.

VM

3.1

Verify tax due from the order of payment: Check the rates applied against the rates embodied in the tax ordinance Re-compute the assessment

C VM

3.2

Secure and verify the Statements of Gross Sales/Receipts if it includes the following: Total number of tickets Total number of tickets sold Unit price of each tickets Total amount collected Reports are duly signed by the operators/promoter

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.3

Secure from the BIR the names of the promoters whose tickets have been approved and registered with them including the date of registration, classes, admission prices and inclusive serial numbers of the admission tickets. Compare the data gathered with the information given by the operators/promoters. Note for any discrepancy found in the comparison made.

C EO

3.4

Determine whether tickets have been registered with the Treasurer's Office and check their dates of registration, classes, admission prices and inclusive serial numbers. Secure from the Treasurers Office list of promoters/operators who are exempted from paying the amusement tax and the corresponding exemption certificates from Sanggunian. Verify whether the exemption is in accordance with the tax ordinance. If not, determine the amount of revenue that should have been realized if the amusement tax is collected. From the samples of Official Receipts (OR) and Report of Collections and Deposits (RCD). Compare the amount of taxes due per order of payment with the amount collected per OR.

C EO

3.5

C VR

3.7

C VR

3.8

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.9

Check the ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate if any.

3.10 See to it that the nature of payment is properly indicated in the ORs. 3.11 Check the numerical sequence of Ors issued. Investigate for the missing receipts.

C EO C

3.12 Ascertain whether all copies of cancelled ORs are attached to the RCD. Inquire for the cause of cancellation. 3.13 Verify correctness of the Collectors RCD. Ascertain that the RCDs have been duly certified by the collector and the liquidating officer/treasurer. Match collections against deposits to establish undeposited collections

C VR

3.14

C VR

3.15 Compare the dates when collections were made/turned over against the dates of the tellers validation in the deposit slip to determine delays in the deposit of collections. 3.16 Compare the amount of cash and checks collected/turned over against the amount of cash and checks deposited to determine accommodated checks. 3.17 Match official receipts issued for checks collections against the list of checks to determine all cash collections are remitted.

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.18 Check footings of the RCD and abstract of collections as well as the movements of accountable forms. Verify whether the balance beginning of the accountable forms is the ending balance per last report. Trace the serial numbers of accountable forms entered in the Received column of the RCD to the covering Requisition and Issue Slip (RIS).

3.19

Verify remittances from the Cashiers /Treasurer's RCD.

C VM PD

4.1 Check the propriety of the presentation of the account. See that it conforms to the provisions of the New Government Accounting System. 4.2 Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements. any.

PD

4.3 Note and document exceptions, if Prepare and issue AOM. PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

5. BUSINESS TAX ( 582 ), INSPECTION FEES ( 617 ) , MAYORS PERMIT FEE NAME OF AGENCY AUDIT PROGRAM

FOR THE PERIOD ________________ ________________TAX/FEE ( Account Code ) Account Description: This account is used to record taxes on businesses enumerated under Article 232 under Article 232 of IRR RA 7160. The following sub-accounts shall be used: Business Taxes and Licenses On domestic sales of manufacturers, assemblers, repackers, processors, brewers, distillers, rectifiers, and compounders of liquors, distilled spirits, and wines or manufacturers of any article of commerce of whatever kind of nature. Business Taxes and Licenses- Wholesalers, Distributors or Dealers. Business Taxes and Licenses- Exporters and on Manufacturers, Millers, Producers, Wholesalers, Distributors, Dealers or Retailers of Essential Commodities Business Taxes and Licenses- Retailers Business Taxes and Licenses- Contractors and Other Independent Contractors. Business Taxes and Licenses- Banks and Other Financial Institutions Business Taxes and Licenses- Other Businesses Audit Objectives: 1. To determine whether all transactions pertaining to business taxes are accurately recorded and properly classified in the account and that the account balance is accurate. 2. To determine whether business taxes and licenses collected including fines and penalties are in accordance with the tax ordinance and are properly receipted, accounted for and remitted promptly. 3. To determine the accuracy of the reported tax delinquencies and whether remedies to enforce the collection of tax delinquencies are effectively availed of by the LGU. 4. To determine the proper financial statement presentation of the account and the adequacy of disclosure. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace the account balance per FS to the general ledger (GL) and subsidiary ledgers (SL). Verify the correctness of postings in the SL from the Cash Receipts Journal (CRJ) and the General Journal (GJ). Check footings. Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the Report of Collections and Deposits (RCD) and the source documents as to: Income distribution A cc ou nti ng en tri es

C EO C EO

1.2

1.3

1.4

C EO RO VM

From the samples of assessment forms, individual taxpayers records, Official Receipts (OR) and Report of Collections and Deposits (RCD). 2.1 Verify if the payments are in accordance with the tax ordinance VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.2 Compare amount of ORs against the Tax Order of Payment and Business Permit License Office (BPLO) Application Form. 2.3 2.4 Note undercollections. underassessments /

C RO C

Check the ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate, if any. See to it that the nature of payment is properly indicated in the ORs. Check the numerical sequence of ORs issued. Investigate for the missing receipts.

2.5 2.6

C VM C

2.7 Ascertain whether all copies of cancelled ORs are attached to the RCD. Inquire for the cause of cancellation. 2.8 Verify correctness of the Collectors RCD. Ascertain that the RCDs have been duly certified by the collector and the liquidating officer/treasurer. Match collections against remittances to determine the unremitted collections.

2.9

2.10 Compare the amount of cash and checks collected/turned over against the amount of cash and checks deposited to determine accommodated checks.

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.2

Check footings of the RCD and the movement of accountable forms. Verify whether the balance beginning of the accountable forms is the ending balance per last report. Trace the serial numbers of accountable forms entered in the Received column of the RCD to the covering Requisition and Issue Slip (RIS).

C EO

2.3

Verify remittances of collectors /liquidating officers from the Cashiers/Treasurer's RCD. delinquencies for the last five Years.

C EO C C C EO C C EO VM C VR

3.1 Secure copies of the certified lists of tax 3.2 Determine the samples to be verified from
the latest list of tax Delinquencies.

3.3 Trace the samples selected to the individual


account register, and compare the period and amount of delinquencies.

3.4 Investigate the discrepancies noted. 3.5 Send confirmation letters to taxpayers
concerned to validate delinquencies. 3.6 In case of payments discovered from the confirmation replies, check

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

OR reported to RCD. Note down discrepancies, and conduct further verification for possible fraud. 3.7 Determine whether all delinquent taxpayers were sent notices and the frequency thereof. 3.8 Check if the period of delinquencies is indicated in the list and determine the aging of delinquencies. C EO VM C EO

3.9 Verify actions taken to enforce collection of delinquent taxes pursuant to Section 174 of the Local Government Code such as: Administrative action or levy of property Judicial action

VR

3.10 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting Systems. 4.1 Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements. 4.2 Note and document exceptions, if any. Prepare and issue AOM. PREPARED BY : Date REVIEWED BY : Date

VM PD

PD

APPROVED BY : Date

6. GRANTS AND DONATIONS NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ GRANTS AND DONATIONS ( Account Code ) Account Description: This account is used to record all non-repayable grants, donations in cash and in kind from other levels of government, private sector or international institutions. Audit Objectives: 1. To ascertain whether all transactions pertaining to grants and donations are accurately recorded and properly classified in the accounts and that the account balance is accurate. 2. To determine whether the grants and donations are properly receipted and recorded in the books. 3. To determine the proper presentation of the account in the financial statements and the adequacy of disclosure. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Rights and Obligations ( RO ), Valuation and measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace the account balance per Financial Statements to the general ledger (GL) and the subsidiary ledgers (SL).

C EO

1.2 Verify the correctness of postings in the SL from the Cash Receipts Journal (CRJ) and the General Journal (GJ). Check footings.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3

Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the Report of Collections and Deposits and the source documents as to: Account classifications Accounting entries

1.4

C EO VM

2.1

For grants and donations in cash, verify checks/bank credit memo. See that these are duly receipted by examining the pertinent Official Receipts. For grants and donations in kind, verify deed of donations and/or appraisal documents. Check correctness of valuation. If possible, confirm from donors the donations they made.

C EO RO EO

2.2

2.3

C EO RO VM C EO RO VM PD

2.4

3.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting System. 3.2 Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements.

PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

7. COMMUNITY TAX NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ COMMUNITY TAX ( Account Code 583 ) Account Description: The account is used to record tax levied upon every inhabitant of the Philippines eighteen (18) years of age or over who has been regularly employed on a wage or salary basis for at least 30 consecutive working days during any calendar year, or who is engaged in business or occupation, or who owns real property with an aggregate assessed value of P1,000 or more or who is required by law to file an annual income tax return. This account is also used to record the annual community tax levied upon corporation engaged in or doing business in the Philippines.

Audit Objectives: 1. To ascertain whether all transactions pertaining to fees for community taxes are completely and accurately recorded and properly classified in the accounts and that the account balance is accurate. 2. To determine whether community taxes collected are properly receipted, accounted for and remitted promptly. 3. To determine the proper presentation and adequacy of disclosure in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace the account balance per Financial Statements to the general ledger (GL) and subsidiary ledgers (SL).

C EO

1.2

Verify the correctness of postings in the GL from the Cash Receipts Journal (CRJ) and the General Journal (GJ). Check footings. Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the Report of Collections and Deposits (RCD) and the source documents as to: Income distribution Accounting entries

C EO

1.3

1.4

C EO RO VM

From the samples of Official Receipts (ORs) and Report of Collections and Deposits (RCD). 2.1 Verify if the payments are in accordance with the tax ordinance, RA 7160 and BIR regulations. Compare the amount of tax due per order of payment or its equivalent with the amount collected per official receipt. For corporations, check /confirm gross receipts based on documents on file with the BPLO. VR

2.2

2.3

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.4

Check the ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate, if any.

2.5 2.6 2.7

See to it that the nature of payment is properly indicated in the ORs. Check the numerical sequence of ORs issued. Investigate the missing receipts. Ascertain whether all copies of cancelled ORs are attached to the RCD. Inquire for the cause of cancellation. Verify correctness of the Collectors RCD. Ascertain that the RCD have been duly certified by the collector and the liquidating officer/treasurer. Match collections against deposits/remittances to determine the differences thereof.

C C C

2.8

C VR

2.9

2.10 Compare the dates when collections were made/turned over against the dates of the tellers validation in the deposit slip to determine delays in the deposit of collections. 2.11 Compare the amount of cash and checks collected/turned over against the amount of cash and checks deposited to determine accommodated checks. 2.12 Match ORs issued for checks collections against the list of checks to determine all cash collections are remitted.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.13 Check footings of the RCD and abstract of collections as well as the movements of accountable forms. 2.14 Verify whether the balance beginning of the accountable forms is the ending balance per last report. 2.15 Trace the serial numbers of accountable forms entered in the Received column of the RCD to the covering Requisition and Issue Slip (RIS). 2.16 Verify remittances of collectors/ liquidating officers from the Cashiers/Treasurer's RCD. 3.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting System. 3.2 Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements. 3.3 Note and document exceptions, if any. Prepare and issue AOM.

C EO

VM PD

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

8.

DIVIDEND INCOME NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DIVIDEND INCOME ( Account Code 661 )

Account Description: This account is used to record dividends in cash derived from investments on stocks of government corporations and private enterprises. Audit Objectives: 1. To ascertain whether all transactions pertaining to dividend income are completely recorded in the books. 2. To determine the correctness of dividend income recorded in the books . 3. To determine the proper presentation of the account in the financial statements and the adequacy of disclosure. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR), Rights and Obligations ( RO ), Valuation and measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace the account balance per Financial Statements to the general ledger (GL) and subsidiary ledgers (SL). Verify the correctness of postings in the SL from the Cash Receipts Journal (CRJ) and the General Journal (GJ). Check footings.

C EO C EO

1.2

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3

Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the Report of Collections and Deposits (RCD) and the source documents as to: Account classification Accounting entries

1.4

C EO VM

1.5

Verify the stock certificates, the notice of declaration of dividends and the corresponding dividend check and bank credit memo.

C EO VR RO C EO RO

2.1 Secure copies of the documents relating to investments. Check the rates of dividends expected to be received. Compare this with the amount recorded per books. 3.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting System. Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements.

VM PD

3.2

PD

3.4 Note and document exceptions, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

9. INTERNAL REVENUE ALLOTMENT NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INTERNAL REVENUE ALLOTMENT ( Account Code 665 ) Account Description: This account is used to record the share of local governments from national internal revenue collections. The individual shares of each local government units are automatically released, without need of further action, direct to the provincial, city, municipal or barangay treasurer, as the case maybe, on a quarterly basis but not beyond five (5) days after the end of each quarter. Audit Objectives: 1. To ascertain that all Notices of Funding Check and Bank Credit Advice so received are duly recorded in the books and that the account balance is accurate. 2. To determine the proper presentation of the account in the financial statements and the adequacy of disclosure. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the account balance per Financial Statement to the general ledger (GL) and subsidiary ledgers (SL). 1.2 Verify the correctness of postings in the GL to the General Journal (GJ). Check footings.

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3

Check correctness of the entries in the Journal Entry Voucher (JEV).

C C EO RO VM PD

1.4 Verify whether the entries are supported by Notice(s) of Funding Checks Issued and the bank credit memo. 2.1 Check the propriety of the presentation of the account. See that it conforms to the provisions of the New Government Accounting System. 2.2 Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements. Note and document exceptions, if any. Prepare and issue AOM.

PD

2.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

10. MARKET OPERATIONS

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ MARKET OPERATIONS ( Account Code 636 ) Account Description: This account is used to record income realized from the operation of the market including rental of market stalls,

Audit Objectives: 1. To ascertain whether all transactions pertaining to income from market operations completely recorded and properly valued and classified. 2. To determine whether market fees are correctly assessed, and in conformity with existing ordinance, rules and regulations and that income from market operations properly receipted, accounted for and are promptly remitted. 3. To determine the proper presentation of the account in the financial statements and adequacy of disclosure. are the are the

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the account balance per Financial Statements to the General Ledger (GL) and subsidiary ledger (SL). 1.2 Verify the correctness of postings in the GL from the Cash Receipts Journal (CRJ) and General Journal (GJ). Check footings.

C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.3 Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. 1.4 Check correctness of the entries in the JEV from the Report of Collections and Deposits (RCD) and the source documents. 1.5 Note and document exceptions. Collection from Stallholders 2.1 Secure copies of lease contracts of stallholders per official receipts, schedule of market rates imposed by the local government unit and pertinent local ordinances.

C EO RO

VR

2.2 Compare the schedule with the rates prescribed in the local ordinance establishing market rates. 2.3 Obtain sample of official receipts from market collections. 2.4 Conduct an ocular inspection of block tiendas and stalls and interview stallholders to verify the actual area/number of stall occupied.

VM

C C

2.5 Compare results of inspections /interviews with those appearing on records/lease contracts. Inquire from management action taken for excess space occupied.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.6 Compute rentals due from stallholders which should include the additional fees for excess space occupied. 2.7 Compare rentals paid per sampled ORs with rentals computed in No. 2.6.

C EO VM C

2.8 Note and document exceptions. 2.9 Based on samples of Official Receipts (OR) and Report of Collections and Deposits (RCD), verify if payments are in accordance with the tax ordinance. VR

2.10 Check the ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate if any. 2.11 See to it that the nature of payment is properly indicated in the OR. 2.12 Check the numerical sequence of ORs issued. Investigate for the missing receipts. 2.13 Ascertain whether all copies of cancelled ORs are attached to the RCD. Inquire the cause of cancellation. 2.14 Verify correctness of the Collectors RCD. Ascertain that the RCD have been duly certified by the collector and the liquidating officer/treasurer.

C RO

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.15 Match collections against remittances to determine the differences thereof. 2.17 Check footings of the RCD and summary of collections as well as the movements of accountable forms. Verify whether the beginning balance of the accountable forms is the ending balance per last report. Trace the serial numbers of accountable forms entered in the Received column of the RCD to the covering Requisition and Issue Slip (RIS). 2.18 Note and document exception Collections from Ambulant Vendors 2.19 Secure copies of RCDs of collecting clerks in charge of collection from ambulant vendors in the public market. 2.20 Make ocular inspection to check the accuracy of collections made. 3.1 Check whether procedures in the ordinance for the collection of fee from ambulant vendors are enforced; ex. tearing of cash tickets to avoid reissuance; vendors occupying designated places; etc. 3.2 Verify correctness of the Collectors RCD. Ascertain that the RCD have been duly certified by the collector and the liquidating officer/treasurer.

C EO

C EO C VR

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.3

Match collections against remittances to determine the differences thereof.

C C

3.4 Check footings of the RCD and summary of collections as well as the movements of accountable forms. Verify whether the beginning balance of the accountable forms is the ending balance per last report. Trace the serial numbers of accountable forms entered in the "Received" column of the RCD to the covering Requisition and Issue Slip (RIS).

3.5 3.6

Note and document exceptions. Check the propriety of the presentation of the account. See that it conforms to the provisions of the New Government Accounting System. whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements. Note and document exceptions, if any. Prepare and issue AOM. VM PD

3.6 Check

PD

3.8

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

11. Real Property Taxes ( 588 ) ; Special Education Tax ( 591 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

___________________ TAX ( Account Code ) Account Description: Real Property Tax (RPT) - This account is used to record the ad valorem tax imposed on real properties and their improvements. Real property includes land, buildings, machinery, and other improvements affixed or attached to the real property. Special Education Tax (SEF)- This account is used to record the tax collected on real property in addition to the basic real property tax for SEF. Audit Objectives: 1. To ascertain that all RPT and SEF are properly recorded and that the balances in the Financial Statements are correct and whether the revenue recorded per books pertained to the correct accounting period. 2. To determine whether all real property taxes are assessed correctly and in conformity with the prescribed rules and regulations and to determine the accuracy of the reported real property tax delinquencies. 3. To determine whether real property and special education taxes collected are properly receipted, accounted for and promptly remitted. 4. To determine the proper presentation in the financial statements and the adequacy of disclosure. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ) Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the account balance per Financial Statements to the general ledger (GL) and the subsidiary ledgers (SL). 1.2 Verify the correctness of postings in the SL from the Cash Receipts Journal (CRJ) and the General Journal (GJ). Check footings. Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the RCD and the source documents as to: Account classification Accounting entries 1.5 Note and document exceptions.

C EO

C EO

1.3

1.4

C EO RO VM

2.1 Secure copies of Tax Declaration (TD),


Field Appraisal and Assessment Sheets (FAAS) and Schedule of Fair Market Value (SFMV) corresponding to the RPTRs selected as samples.

VR

2.2 Compare the data appearing both in the TD


and FAAS. Re-compute the fair market value of the property based on the SFMV and FAAS, and compare the value appearing in the TD.

C VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.3 Verify the correctness of the application of


assessment level appearing in the TD.

C VM VR

2.4 Secure a list of real properties exempted


from taxes and verify whether exemption is in accordance with Section 234 of RA 7160.

2.5 Conduct inspection on a selective basis to


verify the correctness of the application of real property classification. Investigate discrepancies noted.

EO VR VM C

2.6 At the beginning of the year, secure copies


of JEVs pertaining to adjustments of advanced payments in the previous years. Check the correctness of entries made.

2.7 During the year, take note of advanced


payments made. Verify whether all payments made in advance are properly taken up in the books of accounts. (See related procedures in the audit of the related liability account for advanced payments of real property tax).

C VM

2.8 Secure certified lists of real property tax


delinquencies for the last five years and determine samples to be verified.

2.9 Trace the samples selected to the individual


real property tax account register, and recompute the amount of delinquencies.

C VM

2.10

Investigate the discrepancies noted.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.11 Send confirmation letters to taxpayers


concerned to validate delinquencies.

C EO C

2.12 In case of discrepancies discovered from


the confirmation replies, check RPTR reported to RPTAR. Inquire into the reasons therefore.

2.13 Prepare

a trend analysis of tax delinquencies for five years. Investigate material variances. Note and document exceptions. From the samples of Real Property Tax Receipts (RPTR), Report of Collections and Deposits (RCD), Abstract of Real Property Tax Receipts (ARPTR) and Notice of Assessment and Tax Bill (NATB)/Real Property Tax Order of Payment (RPTOP).

C VM

3.1 Compare the amount of real property taxes due per NATB / RPTOP with the amount collected per RPTR. Take note of any discrepancy and investigate. 3.2 Check whether fines and penalties are strictly imposed on delinquent payments. Verify correctness of the computations. If there are advance payments made, verify whether the discount granted is in accordance with the ordinance.

C EO VM

C VR VR

3.3

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.4 Check whether the amount in words agrees


with the figures shown in the RPTR. Take note of any alteration or erasure in the RPTR.

3.5 See to it that the breakdown of payment is


properly indicated in the RPTR. 3.6 Trace the serial numbers of RPTRs issued, to the RCD and ARPTR. 3.7 Check the numerical sequence of RPTRs issued. Investigate for the missing receipts. 3.8 Ascertain whether all copies of cancelled RPTRs are attached to the RCD. Investigate the cause of cancellation. 3.9 Verify correctness of the RCD. Ascertain that the RCD has been duly certified by the collector. 3.10 Compare the Collectors'/Tellers' RCD with the Treasurer's/Cashier's RCD. Match collections against remittances to determine the differences therein. Check footings of the RCD and ARPTR as well as the movements of accountable forms. Verify whether the beginning balance of the accountable forms is the ending balance per last report.

C C C

C VR

3.11

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

Trace the serial numbers of accountable forms entered in the "Received" column of the RCD to the covering Requisition and Issue Slip (RIS). Note and document exceptions. VM PD

3.12

4.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting System. 4.2 Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements Note and document exceptions, if any. Prepare and issue AOM.

PD

4.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

12. Registration Fees NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ REGISTRATION FEES ( Account Code ) Account Description: This account is used to record registration fees collected by government agencies and local government units like registration of cart and sledge, registration of large cattle, registration on civil status and marriage fees. Audit Objectives: 1. To ascertain whether all transactions pertaining to registration fees are completely recorded and the account balance is accurate. 2. To determine whether registration fees collected are properly receipted, accounted for and are promptly remitted and in accordance with existing rules and regulations . 3. To determine that adequate disclosure has been made in the financial Statements.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the account balance per Financial Statements to the General Ledger (GL) to the subsidiary ledgers (SL).

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.2

Verify the correctness of postings in the GL from the Cash Receipts Journal (CRJ) and General Journal (GJ). Check footings. Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the Report of Collections and Deposits (RCD) and the source documents.

1.3

1.4

C EO RO

1.5 Note and document exceptions. 2.1 Based on samples of Official Receipts (OR) and Report of Collections and Deposits (RCD), verify if the payments are in accordance with the tax ordinance. Compare the amount of taxes due per order of payment or its equivalent with the amount collected per OR. Check the ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate if any. VR

2.2

2.3

2.4 See to it the nature of payment is properly indicated in the OR. 2.5 Check the numerical sequence of Ors issued.

C C C

2.6 Ascertain whether all copies of cancelled ORs are attached to the

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

RCD. Inquire cancellation. 2.7

for

the

cause

of C VR

Verify correctness of the Collectors RCD. Ascertain that the RCD have been duly certified by the collector and the liquidating officer/treasurer.

2.8 Match collections against remittances to determine the differences thereof. 2.9 Check footings of the RCD and summary of collections as well as the movements of accountable forms. Verify whether the beginning balance of the accountable forms is the ending balance per last report. Trace the serial numbers of accountable forms entered in the "Received" column of the RCD to the covering Requisition and Issue Slip (RIS).

C C

2.10 Note and document exceptions. 3.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting Systems. 3.2 Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements. Note and document exceptions, if any. Prepare and issue AOM. VM PD

PD

3.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

13. SLAUGHTERHOUSES (For Slaughterhouses operated by the Local Government Unit ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SLAUGHTERHOUSES ( Account Code 637 )

Account Description: This account is used to record income realized from the operation of the Slaughterhouse. Audit Objectives: 1. To ascertain whether all transactions pertaining to fees for slaughterhouses operations are completely and accurately recorded and properly classified in the accounts. 2. To determine whether fees from slaughterhouses collected are properly receipted, accounted for and remitted promptly and that the account balance is accurate and in accordance with existing tax ordinance. 3. To determine the adequacy of disclosure in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1

Trace the account balance per Financial Statements to the General Ledger (GL) to the subsidiary ledgers (SL). Verify the correctness of postings in the GL from the Cash Receipts Journal (CRJ) and General Journal (GJ). Check footings. Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology. Check correctness of the entries in the JEV from the Report of Collections and Deposits (RCD) and the source documents.

C EO

1.2

1.3

1.4

C EO RO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.5 Note and document exceptions. 2.1 Based on samples of ORs and Report of Collections and Deposits (RCD), verify if the payments are in accordance with the tax ordinance. Compare the amount of fees due per order of payment/operations reports or its equivalent with the amount collected per OR. *The auditor may compare Operations Reports prepared by the Chief of the Slaughterhouse. 2.3 Check the ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate if any. See to it the nature of payment is properly indicated in the ORs.. Check the numerical sequence of ORs issued. Investigate for the missing receipts. C VR

2.2

C VR

2.4 2.5

C C

2.6

Ascertain whether all copies of cancelled ORs are attached to the RCD. Inquire for the cause of cancellation. Verify correctness of the Collectors RCD. Ascertain that the RCD have been duly certified by the collector and the liquidating officer/treasurer. Match collections against remittances to determine the differences thereof.

2.7

C VR

2.8

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.9

Verify whether the beginning balance of the accountable forms is the ending balance per last report.

2.10 Trace the serial numbers of accountable forms entered in the "Received" column of the RCD to the covering Requisition and Issue Slip (RIS). 2.11 Note and document exceptions. 3.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting System. Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements.

VM PD

3.2

PD

3.3 Issue AOM for all documented exceptions in the audit of this account.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

14.

TUITION FEES, AFFILIATION FEES, LIBRARY FEES, ATHLETIC AND CULTURAL FEES, COMPREHENSIVE EXAMINATION FEES, TRANSCRIPT OF RECORD FEES, DIPLOMA AND GRADUATION FEES NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ ___________________ FEES ( Account Code ) Account Description: This account is used to record tuition/affiliation fees received from students of State Universities and Colleges (SUCs) and other government run schools.

Audit Objectives: 1. To ascertain that all fees have been accurately recorded and properly valued and classified. 2. To determine whether the fees being imposed are authorized by local ordinances and school regulations and that these laws and regulations contribute to the realization of goals or target through efficient and economical means. 3. To determine whether Tuition/Affiliation Fees, Library Fees, and athletic and Cultural Fees collected are promptly and correctly assessed, billed, collected, receipted, remitted and accounted for and that the account balance is accurate. 4. To determine that adequate disclosure has been made in financial statement. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.1 Trace the FS balance to the trial balance to the general ledger (GL).

1.2 Verify the correctness of postings in the GL from the Cash Receipts Journal, Cash Journal and the General Journal. 1.3 Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology.

1.4 Check correctness of the entries in the JEV from the Report of Collection and Deposits and the source documents. 1.5 Analyze income account for propriety of credits. 1.6 Review the general ledger account. Trace entries in the account through the journals to the underlying Report of Collections and Deposits (RCD).

C EO RO C EO C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

1.7 Verify the correctness of vertical and horizontal footings of the RCD by running an independent tape. 1.8 Trace transcription of the data from the official receipt to the RCD. 1.10 Trace column totals of the RCD to the entries in the Cash Receipts Journal/Cash Journal. 1.11 Foot the Cash Receipts Journal/Cash Journal and trace to the postings in the general ledger. 1.12 Verify whether credits to income acounts are proper and that the account classification is correct and consistently followed.

C EO C

VM PD

2.1

Review assessment/bills rendered/ collection records to determine if tax laws, ordinances, regulations, etc. are being applied uniformly and in similar situations as to : rates computations manner of payment penalties, if applicable

C VR VM

2.2 Inquire into the basis or criterion in giving discounts or exemptions, if any, and its effect on income target.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.3

Compare income realized against target/ projections for the period. Analyze trend over several years. Quantify differences. Determine causes income generation. of shortfalls in

VM

2.4

VM VM

2.5 Check if increased income was caused by: 2.6 higher rates of income more efficient system or effort by management understated estimate/projection of income

Look into the agencys method or basis of estimating income and see that it is reasonable and attainable. Check if the agency provides for a mechanism to establish and control the cost of realizing or collecting income and compare and analyze the cost per peso of income generated/collected to determine efficiency in operation. = Cost

VR

2.7

VM

Total cost of income generation per peso Total income realized

of income

2.8 Discuss with management the possibility of increasing income thru improved assessment/ billing/collection procedures or by correcting negative practices and other factors that prevent the attainment of income targets.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

2.9 Note and document exceptions. 3.1 Obtain a copy of the Schedule of approved School Fees. C C

3.2 From the list of students, secure samples of registration cards filed at the Registrars Office. 3.3 Check the completeness of data and accuracy of rates. Re-compute the assessment.

3.4 Based on the samples of Official Receipts (OR) and Report of Collections and Deposits (RCD), verify if the payments are in accordance with the assessments.

C EO RO VM C VR VM

3.5 Compare the amount of fees due per order of payment or its equivalent with the amount collected per official receipts. 3.6 Check the ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate if any.

C RO C

3.7 See to it the nature of payment is properly indicated in ORs. 3.8 Check the numerical sequence of ORs issued. Investigate for the missing receipts. 3.9 Ascertain whether all copies of cancelled official receipts are attached to the RCD. Inquire for the cause of cancellation.

C C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

W P Re f

3.10 Verify correctness of the Collectors RCD. Ascertain that the RCD have been duly certified by the collector and the liquidating officer/treasurer. 3.11 Match collections against remittances to determine the differences thereof. 3.12 Check footings of the RCD and summary of collections as well as the movements of accountable forms. 3.13 Verify whether the beginning balance of the accountable forms is the ending balance per last report. Verify whether the beginning balance of the accountable forms is the ending balance per last report. 3.14 Trace the serial numbers of accountable forms entered in the Received column of the RCD to the covering Requisition and Issue Slip (RIS). 3.15 Note and document exceptions. 4.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting System. 4.2 Check whether adequate disclosure concerning the accounting method or recording income has been made in the financial statements. Note and document exceptions, if any. Prepare and issue AOM.

C VR

C C

VM PD

PD

4.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

15. Fees on Weights and Measure NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ FEES ON WEIGHTS AND MEASURE ( Account Code 601 ) Account Description: This account is used to record the fees imposed for sealing and licensing of weights and measures Audit Objectives: 1. To ascertain whether all transactions pertaining to fees for weights and measures are completely and accurately recorded and properly valued and classified in the accounts. 2. To determine whether weights and measures and miscellaneous other taxes collected are properly receipted, accounted for and remitted promptly and that the account is correctly presented. 3. To determine the adequacy of disclosure in the financial statements. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1

Trace the account balance per Financial Statement to the general ledger (GL) and subsidiary ledgers (SL).

C EO

1.2 Verify the correctness of postings in the GL from the Cash Receipts Journal (CRJ) and the General Journal (GJ). Check footings. 1.3 Determine the total number of Journal Entry Vouchers (JEV) to be sampled using the approved sampling methodology.

1.4 Check correctness of the entries in the JEV from the Report of Collections and Deposits (RCD) and the source documents. 1.5 Note and document exceptions. From the samples of Official Receipts (ORs) and Report of Collections and Deposits (RCD):

C EO RO

2.1 Verify if the payments are in accordance


with the tax ordinance and R.A. 7160. *The Auditor may conduct ocular inspection in public markets or related commercial establishments to check whether the sealing and licensing of weights and measures are done by responsible LGU officials.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.2

Compare the amount of fees due per order of payment or its equivalent with the amount collected per OR.

2.3 Check ORs whether the amount in words agrees with the amount in figures. Take note of any alteration or erasure and investigate. 2.4 See to it that the nature of payment is properly indicated in the ORs.

C EO VR VM C

C C

2.5 Check the numerical sequence of ORs issued. Investigate for the missing receipts. 2.6 Ascertain whether all copies of cancelled ORs are attached to the RCD. Inquire for the cause of cancellation. 2.7 Verify correctness of the Collectors RCD. Ascertain that the RCD has been duly certified by the collector and the liquidating officer/treasurer Compare the dates when collections were made/turned over against the dates of the tellers validation in the deposit slip to determine delays in the deposit of collections.

C VR

2.8

VR

2.9 Compare the amount of cash and checks collected/turned over against the amount of cash and checks deposited to determine accommodated checks. 2.10 Match ORs issued for checks collections against the list of checks to determine all cash collections are remitted.

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.11 Check footings of the RCD and abstract of collections as well as the movements of accountable forms. Verify whether the balance beginning of the accountable forms is the ending balance per last report. Trace the serial numbers of accountable forms entered in the Received column of the RCD to the covering Requisition and Issue Slip (RIS).

2.12

Verify remittances of collectors /liquidating officers from the Cashiers/Treasurer's RCD.

2.13 Note and document exceptions. 3.1 Check the propriety of the presentation of the account. See that it conforms with the provisions of the New Government Accounting System. Check whether adequate disclosure concerning the accounting method of recording income has been made in the financial statements. Issue AOM for all documented exceptions in the audit of this account. REVIEWED BY : APPROVED BY : VM PD

3.2

PD

3.3

PREPARED BY :

Date

Date

Date

B.2.1 Audit Programs for Various Expenditure Items 1. Advertising Expenses NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ ADVERTISING EXPENSES ( Account Code 780 )

Account Description : This account is used to record advertising and publication of notices in newspapers and magazines of general circulation, television, radio and other forms of media. Audit Objectives: 1. To ascertain the accuracy/completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. To determine whether the recorded accounts are properly classified and presented in the Financial Statements (FS) and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL).

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.2 Reconcile postings in the GL with the monthly totals of the Check Disbursement Journal (CDJ).

C 1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ and Report of Check Issued (RCI). Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether expenses are incurred in connection with advertising of notices in newspapers and magazines of general circulation, television, radio and other forms of media. Determine whether the advertisement or publication is strictly for the interest of the public and has a bearing on the official functions of the agency and its informational activities. Check whether the vouchers were approved by the proper authorities. C

2.1

C EO VR

2.2

VR

2.3

EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.4

Examine authenticity and regularity of supporting documents which include, among others, the following: Approved advertising/publication contract. Bill of the publisher.

C EO VR

Clippings of the advertisement (in case of advertising and publication of notices in newspapers). C VM C VR

2.5

Review computation and see that the rates are in accordance with those prescribed by the publisher. In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Register of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO). Check the validity of the amount charged.

2.6

2.7

VR VM PD PD

3.1 Compare statement presentation with GAAP and NGAS. 3.2 Determine that the account is properly classified and presented as operating expense under Maintenance and Operating Expense (MOE) in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue Audit Observation Memorandum (AOM)

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

2. Awards And Indemnities Rewards And Other Claims NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ AWARDS AND INDEMNITIES REWARDS ( Account Code 779 ) Account Description : The account Awards and Indemnities is used to record indemnities for destruction of property, death or injury to persons, awards by courts or by administrative bodies. Examples are indemnities for persons injured or killed or property destroyed through military action, indemnities for property taken by the government through civil action, awards and compensation provided by laws. The account Rewards and Other Claims is used to record payment of rewards for any informer or for any act done in connection with the apprehension of an offender. This also includes indemnities paid to persons in the government service who become disabled on account of sickness, injuries, or death which occurred or which were contacted or sustained in the performance of official duty. Audit Objectives: 1. To ascertain the accuracy/completeness and correctness of the account balances as recorded in the books.

2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Check Disbursements Journal (CDJ). 1.3 Prove the accuracy GL. of footings of the

C EO C RO C C C EO VR

1.4 Check the accuracy of the footings of the CDJ and Report of Check Issued (RCI). 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine the nature of expense to ensure it was incurred in connection with indemnities for destruction of property, death or injury to persons, awards by courts or by administrative bodies and payments of rewards for any informer or for any act done in connection with the apprehension of an offender. Check whether the vouchers were approved by the proper authorities.

2.1

EO VR C EO VR

2.3 Examine the authenticity and regularity of supporting documents and check whether they contain the following information: In case of property claim (ex. Road right-of-way claims), Deed

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.4

of Absolute Sale or Conveyance executed by the party and the LGU concerned in proper form duly registered with the Register of Deeds. In case of injury or death to person, certificate of death or physical examination. Indemnity Bond in case the property is unregistered or untitled. Deed of Conveyance or Agreement to Demolish or remove improvement executed in proper form. Sanggunian resolution on the grant, when necessary. Acknowledgement Receipt of grantees/donees VR

Check whether the purchase or acquisition cost is computed in accordance with existing regulations. Seek the assistance of TSO personnel whenever possible.

2.5 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.6 Check the validity of the amount charged and review computation. 2.7 Compare statement presentation with GAAP and NGAS.

VR

C VM VM PD

ASSERTIONFS

AUDIT PROCEDURES

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WP Ref

2.8 Determine that the account is properly classified and presented as operating expense under MOE in the FS. 3.1 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

3. Cash Gift ; Year End Bonus NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CASH GIFT / YEAR END BONUS ( Account Code 724 / 725 ) Account Description: The account Cash Gift is used to record cash gift granted to government officials and employees as authorized by law. The account Christmas Bonus is used to record year-end bonus to government officials and employees as authorized by law. Audit Objectives: 1. To ascertain the accuracy/ completeness and correctness of the account balances as recorded in the books. 2. To ascertain that payments of Year End Bonus and Cash Gift are properly authorized and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented in the FS . Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( Va/LR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL.

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.4 If paid through cash advances, check the entries in the CDJ with the total of Report of Disbursements (RD) prepared by disbursing officers and paid payrolls. 1.5 For those paid through the Automated Teller Machine (ATM), check the entries in the GJ with the total paid payrolls and debit memos from the bank. 1.6 Check the accuracy of footings of the CDJ and RD. 2.1 Using the prescribed sampling method select samples of paid payrolls for subject allowances. From the Personnel Office, obtain list of agency officials and employees authorized to receive such allowances and the amount of benefits they are entitled. Check the names and rate of allowances appearing on the sample payrolls against the list provided by Personnel Office. Verify if the amounts paid are at authorized rate as provided by applicable laws, rules and regulations. Prove the accuracy of footings and cross-footings of the payroll. Verify if payroll totals are recorded in the proper expense account classification in the JCD and GL.

C EO

C EO

C C EO C EO VR

2.2

2.3

C VR

2.4

C VR

2.5

VM PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.6

In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS).

VR

3.1 Compare statement presentation with GAAP and NGAS. 3.2 Determine that the account is properly classified and presented as operating expense under Personal Services (PS) in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

VM PD PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

4. Clothing /Uniform Allowance NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CLOTHING/UNIFORM ALLOWANCE ( Account Code 715 ) Account Description: This account is used to record allowance granted to government officials and employees for office uniforms at such amount as may be authorized by applicable laws/issuances, Appropriation Ordinance which may be given in kind or in cash. Audit Objectives: 1. To ascertain the accuracy/completeness and correctness of the account balances as recorded in the books. 2. To ascertain that payments of salaries and wages are made to duly appointed casual/contractual employees, properly authorized and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( Va/LR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balance in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ).

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Prove the accuracy of the GL. 1.4 Check the entries in the CDJ with the Report of Disbursements (RD).

C C C C EO C EO VR

1.5 Check the accuracy of the footings of the CDJ. 2.1 Secure samples of payrolls for payment of clothing allowance. 2.2 Check the names appearing on the sample payrolls against the appointment papers on file to assure that all names listed belong to the employees of the agency and who are in the service for at least six (6) consecutive months. 2.3 Verify whether clothing allowance granted are authorized by an appropriation laws/issuances. 2.4 Check if the amount of clothing allowance granted is within the authorized rate. 2.5 If clothing allowance was granted in kind, check if the cost of uniform is within the authorized rate. Prove the accuracy of payroll. In the case of NGAs and LGUs, review the related Obligations Slips OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS).

VR

C VR C VR C VR

2.5 2.6

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

3.1

Compare statement presentation with GAAP and NGAS.

VM PD PD

3.2 Determine that the account is properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

5. Communication Expenses

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ COMMUNICATION EXPENSES ( Account Code 771 - 774 ) Account Description This account is used to record the cost of transmission of messages such as, telephone, facsimile machine, telegraph, wireless and cable charges and tolls, telegraph messenger services and internet services. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred.. 3. To determine whether the recorded accounts are properly classified and presented as operating expense under MOE in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash / Check Disbursements Journal (CDJ/CkDJ).

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of Checks Issued (RCI). 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether expenses are incurred for transmission of messages such as telephone, facsimile machine, telegraph, wireless and cable charges and tolls, telegraph messenger services and Internet services. 2.2 Check whether the vouchers were approved by the proper authorities. 2.3 For specific expenditures, take note of the following: Telephone Check the telephone numbers indicated in the bill against the telephone numbers of the units installed in the offices. Check whether long distance calls are duly certified as official calls. Check whether personal calls are charged to the personal account of the employees concerned.

C C

C EO VR

EO VR

C EO EO VR C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Ascertain the number of days during which there has been an interruption in telephone service to determine how much may be deducted from the telephone bills presented.

C EO

Cellular Phones Ascertain that only authorized personnel are allowed to use cellular phones Check the reasonableness of the allowance granted to cellular phone users.

VR VR

Telegraph Ascertain whether telegrams/ cablegrams are for matters of urgent importance, which cannot be effectively transacted thru mails. Ascertain whether messages transmitted are brief and concise. See that messages do not contain personal matter.

VR

VR VR

Internet Secure copy of the Internet contract. Check reasonableness of the contract price. In case pre-paid Internet cards are used, check the reasonableness of the amount reimbursed. EO VR VR

2.4 Examine the authenticity and regularity of supporting documents

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

such as bills authority for officials to use cellular phones, contract in case of Internet facilities, official receipts, etc. 2.5 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Register of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.6 Check the validity of the amount charged and review computation. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

VR

C VR

C VM PD PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

6. Consultancy Services

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ CONSULTANCY SERVICES ( Account Code 793 ) Account Description: This account is used to record the cost of services of individual/private companies, or other government agencies hired to undertake a specific work or job requiring special or technical skills not available in the concerned agency.

Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented as operating expense under MOE in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Check Disbursements Journal (CDJ).

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/ and Report of check Issued. 2.1 Secure Disbursement Vouchers (DV) pertaining to acquisition of consultancy services. Examine DVs and supporting documents and verify whether the expenses incurred represent the cost of services of individual/private companies, or other government agencies hired to undertake a specific work or job requiring special or technical skills not available in the agency. See that the services subject of the consultancy contract is not available in the agency and in-house personnel cannot provide the required expertise.

C C C EO VR

2.2

VR

2.3 Check whether the vouchers were approved by the proper authorities. 2.4 Examine authenticity and regularity of supporting documents which include, among others, the following: Approved consultancy contract Terms of Reference (TOR) Technical and financial proposals of consultants considered in the evaluation.

VR C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Auditorial validation of the necessity of inclusion of equipment and vehicle purchases as required in Sec. 5.7 of NEDA Guidelines on the hiring of consultants. If not in the TOR, appropriate documents containing the following: Statement of scope of work, expected outputs, expected time frame. Minimum requirement of the consultants on expertise desired and qualifications of individual personnel necessary for the undertaking. Approved Project Schedule (PERT/CPM) Network Diagram, Gantt chart or Equivalent). Copy of approved manning schedule. Curriculum vitae of the consultant(s) and staff. Other supporting documents showing the following: Schedule of basic rates certified by the consultant with a sworn statement Derivation of billing factor/ multiplier certified by the consultant with a sworn statement. Detailed breakdown of the reimbursable costs based on the agreed fixed rates.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Detailed breakdown of reimbursable actual costs. For consultancy contract based on percentage-of-construction cost, computation of the Construction Cost which was used for the computation of the consultancy contract cost, duly approved by the agency. VR

2.5 Check whether the provisions of the contract are in accordance with prescribed existing guidelines: 2.6 Performance guarantee Extension services Escalation clause Allowance for contingency

Determine if the consultants and staff are qualified for the job based on the minimum requirements on expertise desired and the individual qualifications of personnel and on the curriculum vitae of the consultants.

VR

2.7 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Register of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.8 Check the validity of the amount

C EO VR

C VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

charged and the correctness of the computation of contract cost. Check the completeness and correctness of the contract breakdown. Actual services rendered/ billing rates Reimbursable cost Other costs requires for the completion of services Percentage of completion costs Allowance for contingency VM PD PD

3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Check whether appropriate disclosures on the account are stated in the Notes to FS. 3.4 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

7.

Depreciation NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DEPRECIATION ( Account Code

Account Description: These accounts are used to record depreciation of Property, Plant and Equipment used in government operations due to wear and tear, deterioration, obsolescence and technological innovation. Audit Objectives: 1. To ascertain the accuracy/completeness and correctness of the account balances as recorded in the books. 2. To ascertain the reasonableness of the depreciation expense considering the life expectancy of fixed assets. 3. To determine the consistency of application of the depreciation method and compliance to generally accepted accounting principles. 4. To determine the correctness of accounting entries for the related depreciation account. 5. To determine whether the recorded accounts are properly classified and presented as operating expense under MOE in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Valuation and measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

AUDIT PROCEDURES

WP Ref

1.1

Trace the account balances in the trial balance/FS to the General Ledger (GL).

C EO C

1.2 Reconcile postings in the GL with

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

the entries in the General Journal and Journal Entry Voucher (JEV). 1.3 Prove the accuracy of the GL. 2.1 Obtain copy of depreciation schedule and verify the same as to completeness. 2.2 2.3 Test the calculation of the amount charged to expenses. Assess the adequacy of depreciation expense by inspecting the asset or examining relevant documents on a test basis. C C C VM C EO VM C VM C VM

2.4 Ascertain that no further depreciation is recorded for fully depreciated assets, even the same remains in use. 3.1 Obtain depreciation schedules in the prior year and compare the same to current year to check consistency of application of depreciation methods. Review the agencys method in computing depreciation and see that this conforms to the generally accepted accounting principles. Obtain copies of JEV and check the correctness of accounting entries.

3.2

VM PD

4.1

C VM PD PD

5.1 Compare statement presentation with GAAP and NGAS. 5.2 Check whether the account is

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

properly classified and presented under operating expense under MOE in the FS. 5.3 Check whether the method of depreciation used is properly disclosed in the Notes to Financial Statements. 5.4 Take note of deficiencies, if any. Prepare and issue AOM. PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

7. Discount on Real Property Tax ( 954 ) Discount on Special Education Tax ( 955 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ DISCOUNT ON ___________________ ( Account Code ) Account Description The account Discount on Real Property Tax is used to record discount granted on the basic RPT paid in case of advance and prompt payment. The account Discount on Special Education Tax is used to record discount granted on the additional one per cent tax on RPT in case of advance and prompt payment. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented as operating expense under MOE in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ) , Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL).

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.2 Reconcile postings in the GL with the entries in the General Journal and Journal Entry Voucher (JEV). 1.3 Prove the accuracy of the GL. 2.1 Secure samples of Reports of Collections and Deposits in accordance with the approved sampling plan. Check JEV as to the propriety of the entries. 2.2 Review the rates of discount given in conformity with the local revenue ordinance. 2.3 Review correctness of computation. 3.1 3.2 Compare statement presentation with GAAP and NGAS. Check whether the account is properly classified and presented under operating expense under MOE in the FS. Check whether appropriate disclosures on the account are stated in the Notes to FS.

C C EO

C VR C VM PD PD

3.3

PD

3.4 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

9. Financial Expenses : Interest Expenses NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ INTEREST EXPENSES ( Account Code 975 ) Account Description: This account is use to record charges imposed as a consequence of the use of money belonging to others, such as interest on bonds, loan advances, treasury bills, treasury notes, certificates of indebtedness, and other interest bearing financial obligations. Audit Objectives: 1. 2 3 To ascertain the completeness and correctness of the account balances as recorded in the books. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL).

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.2

Reconcile postings in the GL with the entries in the General Journal and Journal Entry Voucher.

1.3 Prove the accuracy of the GL. 2.1 Secure the Disbursement Vouchers related to payment of Interest Expense. 2.2 Check whether the proper authorities approved the vouchers. Examine authenticity and regularity of supporting documents. 2.3 Verify the authority for the incurrence of obligations together with the terms and conditions for repayments and the rates of interest charged. 2.4 See that repayments and interest charges are paid on time as stipulated to avoid penalties. 2.5 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO).

C C EO C EO VR C EO VR C VR C VR

2.6 Check the validity of the amount charged and review computation. 3.1 Compare statement with GAAP and NGAS. presentation

C VM PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Check whether appropriate disclosures on the account are stated in the Notes to FS. 3.4 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

10. General Services NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ GENERAL SERVICES ( Account Code 795 ) Account Description: This account is used to record the expenditures for services not else were classified, such as carpentry, plumbing, electrical. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2 To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3 To determine whether the recorded accounts are properly classified and presented as operating expense under MOE in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Vkuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). 1.3 Prove the accuracy of footings of the GL.

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of Check Issued (RCI). 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether the expenses are incurred in connection with procurement of services not elsewhere classified, such as carpentry, plumbing, electrical. 2.2 Check whether the vouchers were approved by the proper authorities. 2.3 Examine authenticity and regularity of supporting documents which include, among others, the following: Request for repair Pre-Inspection Report Job Order. Report of Accomplishment. Waste Material Report Acceptance and Inspection Report Evidence that the Contractor is duly licensed and registered. Certificate of Accreditation (issued by Department of Trade and Industry)

C EO VR

C VR C EO VR

2.4

In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace ALOBS to the Register of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO).

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.5 Check the validity of the amount charged and review computation. 3.1 3.2 Compare statement presentation with GAAP and NGAS. Check whether the account is properly classified and presented as operating expense under MOE in the FS. Take note of deficiencies, if any. Prepare and issue AOM.

C VM PD PD

3.3

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

11. Honoraria NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

HONORARIA ( Account Code 720 ) Account Description: This account is used to record payment for services rendered by government personnel performing activities or discharging duties in addition to, or over and above their regular functions and payment of services of personnel with expertise or professional standing in recognition of his broad and superior knowledge in specific fields. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2 To ascertain that payments of honoraria are properly authorized, documented and actually incurred. 3 To determine whether the recorded accounts are properly classified and presented as operating expense under PS in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

AUDIT PROCEDURES

WP Ref

1.1 Trace the account balance in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL. 1.4 Check the entries in the CDJ with the Report of Disbursements (RD). 1.5 Check the accuracy of the footings of the CDJ.

C EO C

C C C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.1

Secure copies of issuances of the DBM or other appropriate authority authorizing payment of honorarium to officials and employees of the agency.

VR

2.2 Obtain copies of authority/special order to collect honorarium or contract between the agency and payee if the later is not an employee of the agency. 2.3 Secure copies of paid payrolls for honoraria and trace individual claims against authority to collect honoraria.

C EO VR C EO VR C

2.4 Check if honoraria are computed at authorized rates and within the specific period within which the government project is to be accomplished. 2.5 Check if the total honoraria received by the agency personnel permitted to participate in one or more projects during the year do not exceed fifty percent (50%) of their annual salaries. 2.6 Verify if payroll totals are recorded in the proper expense account classification. 2.7 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS.

C VR

VMP D C VR

VM PD PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

3.4

Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

12. Representation Expenses ( 783 ), Confidential ( 881 ), Intelligence ( 882 ), Extraordinary ( 883 ) and Miscellaneous Expenses ( 884 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ __________________ EXPENSES ( Account Code ) Account description : The account Representation Expenses is used to record expenses incurred for meetings, conferences and official entertainment as authorized by law.

The account Extraordinary and Miscellaneous Expenses is used to record extraordinary expenses incurred by government officials and those of equivalent rank as may be authorized by the Department of Budget and Management (DBM) for public relations, membership fees, in government associations and in national professional organizations duly accredited by the Professional Regulation Commission. The account Confidential and Intelligence Expenses is used to record the cost of services which are confidential in nature, rendered by persons who are temporarily employed by authorized administrative or executive officers to carry on successfully administrative activities; compensation of informers employed to detect the whereabouts of criminals or the existence of prohibited games which compensation shall not exceed 10% of the fines imposed upon the convicts and other expressly authorized confidential expenses for which appropriations have been approved specifically for the purpose. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and services actually rendered. 3. To determine whether the recorded accounts are properly classified as presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS AUDIT PROCEDURES TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). 1.3 Prove the accuracy of footings of the GL.

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.4

Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of check Issued (RCI). Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine the nature of the expense to ensure it was incurred for a lawful public purpose. Check whether the vouchers were approved by the proper authorities. As to entertainment expenses, examine supporting documents and check whether they contain the following information: List of persons or official designation of persons entertained. Purpose of entertainment the authenticity and

2.1

C EO VR

2.2 2.5

EO VR C EO VR

2.6 Examine

C EO VR

regularity of supporting documents. See to it that the expenses are supported with receipts or other acceptable evidence if the receipt could not be produced. 2.7 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO).

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.8

Determine whether the total amount of expenses does not exceed the amount authorized by existing law, rules and regulations.

C VR VM C VM PD PD

2.9 Check the validity of the amount charge and review computation. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM. PREPARED BY : Date REVIEWED BY : Date

APPROVED BY : Date

13. Personnel Benefit Contributions : Life And Retirement Insurance Contributions ( 731 ), PAG-IBIG Contributions ( 732 ), Philhealth Contributions ( 733 ), ECC Contributions ( 734 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ __________________ CONTRIBUTIONS ( Account Code )

Account description : Life and Retirement Insurance Contributions account is used to record the government share in premium contributions to life insurance and retirement funds of the GSIS. PAG-IBIG Contributions account is used to record the government share of premium contributions to the Home Development Mutual Fund (HDMF). PHILHEALTH Contributions account is used to record the government share in premium contributions to health insurance funds maintained with the Philippine Health Insurance Corporation (PHIC). ECC Contributions account is used to record the governments share in premium contributions to the Employees Compensation Commission (ECC). Audit Objectives: 1 2 3 To ascertain the completeness and correctness of the account balances as recorded in the books. To ascertain that payments of contributions are valid, properly documented and services actually rendered. To determine whether the recorded accounts are properly and consistently classified as presented and that disclosures are appropriate.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Subsidiary Ledgers (SL) and Cash Disbursements Journal (CDJ).

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Check the accuracy of the footings of the SL and CDJ. 2.1 Verify if individual SL for the accounts are maintained and updated. 2.2 Check mathematical computations of the required government contributions to the GSIS, HDMF, PHIC and ECC. Verify if payroll totals are recorded in the proper expense account classification in the SL and GL.

C C

2.3

C EO PD C EO C EO

2.4 Reconcile balances of the SL with the related payroll. 2.5 Secure copies of remittances made during the year and compare the amount remitted with the actual government share per payroll.

2.6 Compare the dates of remittances with their corresponding due dates to check if government contributions are remitted promptly. 2.7 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement presentation with GAAP and NGAS.

C VR

C VR

VM PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

14.

Longevity Pay NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ LONGEVITY PAY ( Account Code 722 )

Account Description : This account is used to record longevity pay given to government officials and employees as authorized by law. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the book. 2. To ascertain whether payments of Longevity Pay is properly authorized, documented and in accordance with rules and regulations. 3. To determine whether the recorded accounts are properly classified and presented in the FS.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL.

C EO C

1.4

Check the entries in the CDJ with the Report of Disbursements (RD).

C C VR

1.5 Check the accuracy of the footings of the CDJ and the RD. 2.1 Secure copy of appropriate guideline providing the conditions and the authorized amount of longevity pay.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.2 Secure list of agency personnel entitled to receive longevity pay during the year under audit. 2.3 Verify from sample payroll whether payments made are within the authorized rate. 2.4 Validate the length of service of the above personnel from the appointment documents on file. 2.5 Prove the accuracy of footings of the payrolls. 2.6 In the case of NGAs and LGUs, review the related Allotment and Obligations Slips (ALOBS). Trace ALOBS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement GAAP and NGAS. 3.2 Check whether presentation with

C EO VR C EO VR C C VR

VM PD PD

the account is

properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

15. Loss of Assets NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ LOSS OF ASSETS ( Account Code 961 ) Account Description: This account is used to record the cost of losses of government funds and property due to theft, fortuitous events/calamities/civil unrest and war based on approved relief from accountabilities. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred.

3. To determine the correctness of accounting entries. 4. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the entries in the General Journal and Journal Entry Voucher (JEV). 1.3 Prove the accuracy of the GL. 2.1 Secure Disbursement Voucher and verify whether the expense represents the cost of losses of government funds and property due to theft, fortuitous events / calamities/civil unrest and war based on approved relief from accountabilities.

C EO C

C C EO VR

2.2 Check whether the vouchers were approved by the proper authorities. 2.7 Verify whether the disbursement voucher is supported with approved relief from accountability by proper authorities. Review computations, if applicable.

EO VR C EO VR

3.1 Obtain a copy of JEV and check the correctness of accounting entries.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

4.1 Compare statement GAAP and NGAS.

presentation with

VM PD PD

4.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 4.3 Check whether appropriate disclosures on the account are stated in the Notes to FS. 4.4 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PREPARED BY : Date 16. Office Supplies Expenses

REVIEWED BY : Date

APPROVED BY : Date

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ OFFICE SUPPLIES EXPENSES ( Account Code 755 ) Account Description: This account is used to record the cost of all office supplies, printed general forms, janitorial supplies, IT supplies, etc. used in connection with government operations. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books.

1. To ascertain that the expenses incurred are valid, properly authorized, documented and goods actually delivered.. 3. To determine whether the recorded accounts are properly classified and presented and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). 1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of Checks Issued (RCI). Secure copy of the Summary of Supplies and Materials Issued (SSMI) together with the original copy of the Requisition and Issue Slip (RIS). Examine completeness of the forms and report, and reconcile both records pertaining to office supplies issued. Analyze and check the computations made in the SSMI, particularly, the cost of office supplies issued.

C EO C

C C

2.1

C EO

2.2

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.3

Trace total amount charged to office supplies expense in the SSMI to the JEV. Verify whether the issued office supplies in the RIS were posted to the individual supplies ledger card.

C EO C

2.4

2.5 Trace JEV entries to GJ entries. 3.1 Secure copy of Cash Disbursements Journal and trace office supplies expenses charged out of petty cash fund (PCF) to the Report of Disbursements made by the Disbursing Officer. the replenishment

C C EO VR

3.2 Examine

disbursement vouchers (DV), petty cash vouchers and other supporting papers as to its completeness, propriety, in accordance with laws, rules and regulations, and accuracy of accounts. 3.3 Check the correctness of the pertinent Journal entry Voucher (JEV).

EO VR

C C VM PD PD

3.4 Trace JEV to the GJ entries. 4.1 Compare statement presentation with GAAP and NGAS. 4.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

4.3 Check whether appropriate disclosures on the account are stated in the Notes to FS. 4.4 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date

17. Other Bonuses and Allowances ( 719 ), Other Personnel Benefits ( 749 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ ____________________________ ( Account Code ) Account Description: The account Other Bonuses and Allowances is used to record the payment of other bonuses and allowances not classified under the specific accounts while Other Personnel Benefits is used to record benefits not otherwise classified under any of the specific personnel benefits accounts. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books.

2. To ascertain whether payments of Other Bonuses and Allowances and Other Personnel Benefits are properly authorized, documented and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL. 1.4 Check the entries in the CDJ with the Report of Disbursements (RD). 1.5 Check the accuracy of the footings of the CDJ and RD. 1.6 Take notes and verify discrepancies. 2.1 Secure copy of laws/other issuances providing the conditions and the authorized amount of Other Bonuses and Allowances and Other Personnel Benefits. Secure sample payrolls and verify if payments made to agency personnel are within the authority granted.

C EO C

C C C C C VR

2.2

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.3 Prove the accuracy of footings of the payrolls. 2.4 Verify if payroll totals are recorded in the proper expense account classification in the GL. 2.5 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.3 Check whether appropriate disclosures on the account are stated in the Notes to FS. 3.4 Take note of deficiencies, if any. Prepare and issue AOM.

C C PD C VR

VM PD PD

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

18. Other Maintenance and Operating Expenses NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ OTHER MAINTENANCE and OPERATING EXPENSES ( Account Code 969 ) Account Description: This account is used to record the costs of all other expenses not otherwise classified under any of the specific expense account. This includes books distributed to public schools, survey expenses, etc. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of Cash/Check Disbursement Journal (CDJ/CkDJ).

C EO C

1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements(RD)/Report of Checks Issued (RCI) Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether the expenses are not otherwise chargeable against other expense accounts. Examples are books distributed to public schools, survey expenses, etc. Check whether the vouchers were approved by the proper authorities.

C C

2.1

C EO VR

2.2

EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.3 Examine the authenticity and regularity of supporting documents which include, among others, the following: For books distributed to public schools In addition to the requirements for procurement - Acknowledgement receipt by school superintendent or authorized official. EO VR

For Survey Expenses Canvass of available in the locality. service C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Accomplishment Report.

For Garbage Expenses Appropriate bidding documents which include among others, Notice of Publication, Invitation to Bid, Bid Bonds. Performance Bond. Approved Garbage Collection/ Disposal Contract. Accomplishment Report

C EO VR C VR VR C EO VR C EO

For Garbage Contract, verify the following: Inclusive dates of effectivity. Description and number of units of dump trucks to be utilized. Description age, condition, and number of units of all other equipment to be rented. The terms and conditions whether operated or base rental for heavy equipment. The number of paleros, if any. The area of operation The designated dump site Indicate whether per trip basis or package deal. The contract amount; its detailed breakdown showing in sufficient details its derivation as prepared by management. Estimated volume in cubic meters of water/garbage to be hauled from the area of operation.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Measurement in kilometers of the distance covered by one complete route including the following: Environment Sanitation Center (ESC) to area of collection. Total distance of the collection area covered. ESC to designated dumpsite.

Copy of current canvass parts, machine shop costs and other maintenance parts used in the detailed breakdown of the contract amount. C PD

2.4 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.5 Check the validity of the amount charged and review computation. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Check whether appropriate disclosures on the account are stated in the Notes to FS.

C VR VM PD PD

PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

3.4 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

19. Overtime and Night Pay NAME OF AGENCY AUDIT PROGRAM

FOR THE PERIOD ________________ OVERTIME AND NIGHT PAY ( Account Code 723 ) Account Description: The account Overtime and Night Pay is used to record payment for working in excess of the minimum total hours set for a given period to employees of the agency. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that payments of overtime and night pay properly authorized documented and services actually incurred. 3. To determine whether the recorded accounts are properly and consistently classified as presented and that disclosures are appropriate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL.

C EO C

1.4 Check the entries in the CDJ with the Reports of Disbursements (RD).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Check the accuracy of the footings of the CDJ and the RD. 2.1 Using the prescribed sampling method, select samples of payrolls for overtime services. Secure copies of the authority to render overtime services and trace individual overtime claims against the authority to render overtime work.

C C

2.2 Check if overtime services are reflected in the authorized attendance reports and/or time logbooks for the period under review. 2.3 Recompute overtime pay to check if payments are computed at authorized rates and within the specific period within which such service is to be rendered. Verify whether the total amount of overtime compensation allowed to an employee during the year does not exceed fifty percent (50%) of his basic salary. Verify if payroll totals are recorded in the proper expense account classification in the GL.

C EO

C EO VR

2.4

C VR

2.5

VM PD C VR

2.6 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Obligations (RAAOPS). Allotment and Personal Services

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

3.1 3.2

Compare statement presentation with GAAP and NGAS. Check whether the account is properly classified and presented as operating expense under PS in the FS.

VM PD PD

3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

20. Pensions and Other Retirement Benefits NAME OF AGENCY

AUDIT PROGRAM FOR THE PERIOD ________________ _________________ BENEFITS ( Account Code )

Account Description: The account Pensions and Other Retirement Benefits is used to record pensions and retirement benefits of government officials and employees or their dependents for past services rendered. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that payment of Pensions and Other Retirement Benefits are properly authorized, adequately documented and actually incurred.

3. To ascertain that payment is made to the rightful claimant/beneficiary. 4. To determine whether the recorded accounts are properly and consistently classified as presented and that disclosures are appropriate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Rights and Obligations ( RO ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1

Trace the account balances in the trial balance/FS to the General Ledger (GL).

C EO

1.2 Reconcile postings in the GL with the monthly totals of the Cash Disbursements Journal (CDJ).

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Prove the accuracy of the GL. 1.4 Check the entries in the CDJ with paid disbursement vouchers. 1.5 Check the accuracy of the footings of the CDJ. 2.1 Secure disbursement vouchers for payment of pensions and retirement benefits. 2.2 Verify if the claims are supported by the following documents: a. Approval of retirement by the agency and GSIS retirement gratuity adjudication. Complete statement of service record including statement of leave of absence with pay. Clearance from money and property accountability from the paying agency and clearance from GSIS.

C C C C EO

EO VR

b.

C EO RO

c.

d. Copy of latest appointment showing highest salary received if salary under last appointment is not the highest. e. Statement of Assets and Liabilities.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

f.

Certificate that employee has no pending administrative and/or criminal case against him.

VR

VR g. Clearance from the Ombudsman. h. Comment and recommendation of employer regarding services rendered in other agencies. 2.3 2.4 Recompute retirement benefits due the claimant or beneficiaries. Verify if the amount paid is recorded in the proper expense account classification in the CDJ and GL. VR

C VM C VM EO VR

3.1 Scrutinize claimants signature if retiree is living at the time of payment. Compare them with those on the oath of office or specimen signature on file, if any. 3.2 If the retiree dies before payment, check if payment was made to the designated beneficiary/ies or legal heirs. 3.3 In the case of NGAs and LGUs, review the related Allotment and Obligations Slips (ALOBS). Trace ALOBS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS).

VR

C VR

4.1 Compare statement presentation with GAAP and NGAS.

VM PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

4.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 4.3 Check whether appropriate disclosures on the account are stated in the Notes to FS. 4.4 Take note of deficiencies, if any. Prepare and issue AOM.

PD

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

21. Personnel Economic Relief Allowance ( PERA ); Additional Compensation (ADCOM )

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ PERA/ADCOM ( Account Code 711/712 ) Account Description: The account Personal Economic Relief Allowance (PERA) is used to record allowances granted to all appointive national and local government employees occupying itemized plantilla positions, casual and contractual employees and to uniformed personnel of the AFP, DILG and NAMRIA pursuant to the annual appropriations act. On the other hand, the account Additional Compensation (ADCOM) is used to record the payment of allowance authorized under Administrative Order No. 53 dated May 17, 1993 granted to all government personnel whether regular or casual; and those on temporary or contractual personnel whose employment is in the nature of a regular employee. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To determine whether payments of PERA and ADCOM are properly authorized, documented and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balance in the trial


balance/FS to the General Ledger (GL).

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.2 Reconcile postings in the GL with the


monthly totals of Cash Disbursements Journal (CDJ).

C EO

1.3 Prove the accuracy of the GL.


1.4 Check the entries in the CDJ with the individual Report of Disbursements (RD).

C C

1.5 Check the accuracy of the footings of the CDJ and the RD. 2.1 Verify whether all personnel listed in the sample payroll are entitled to receive PERA and ADCOM pursuant to existing rules and regulations. Check arithmetical accuracy of the footings of the payroll. In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS).

C EO VR C EO

2.2 2.3

C C VR

3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. Take note of deficiencies, if any. Prepare and issue AOM.

VM PD PD

3.3

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

22. Productivity Incentive Allowance

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ PRODUCTIVITY INCENTIVE ALLOWANCE ( Account Code 717 ) Account Description: This account is used to record the payment of incentive benefits for the recognition of government officials and employees productivity and performance pursuant to law. Audit Objectives 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. 3. To ascertain that payments of Productivity Incentive Allowance is properly authorized, adequately documented and actually incurred. To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Presentation ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial


balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL.

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.4

Check the entries in the CDJ with the Report of Disbursements (RD).

C C C EO

1.5 Check the accuracy of the footings of the CDJ and RD.

2.1

Secure copy of budget circular providing the conditions and the authorized amount of productivity incentive benefits. Secure sample payrolls and verify if the amount paid to agency personnel are within the authority granted. Obtain a list of personnel found guilty in any administrative case or with unsatisfactory ratings from the Personnel Office and verify if they are excluded from the payroll.

2.2

C EO VR

2.3
2.4

Prove the accuracy of footings of the payroll. Scrutinize employees signature. Compare them with those on the oath of office or on payroll sheets of other periods. Verify if payroll totals are recorded in the proper expense account classification in the GL.

C EO VR

2.5

VM PD C VR

2.6 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Obligations (RAAOPS). Allotment and Personal Services

ASSERTIONFS

AUDIT PROCEDURES

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WP Ref

2.7 Compare statement presentation with GAAP and NGAS. 3.1 Check whether the account is properly classified and presented as operating expense under PS in the FS.

VM PD PD

3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

23. Representation Allowance ( RA ); Transportation Allowance ( TA ) NAME OF AGENCY AUDIT PROGRAM

FOR THE PERIOD ________________ REPRESENTATION ALLOWANCE/ TRANSPORTATION ALLOWANCE ( Account Code 713 / 714 ) Account Description: The account Representation Allowance is used to record the allowances granted to authorize officials and employees for representation expenses incurred while in the actual performance of their respective functions which shall be paid from appropriations provided for their respective offices. The account Transportation Allowance on the other hand is used to record allowances granted to authorized officials and employees for transportation expenses which shall be paid from appropriations provided for their respective offices. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books 2. To ascertain that payments of allowances are properly authorized, adequately documented and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balance in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ).

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Prove the accuracy of the GL. 1.4 Check the entries in the CDJ with the individual Report of Disbursements (RD).

C C

1.5 Check the accuracy of the footings of the CDJ and RD. 2.1 Secure copy of laws, rules and regulations authorizing the grant of RATA to agency officials and employees. Obtain list of personnel authorized to receive RATA from the Personnel Office. Secure samples of paid payrolls covering payment of monthly representation and transportation allowances and check if the names of officials and employees appearing therein are included in the above checklist. Verify if allowances granted are within the authority granted. From the Property Office, secure a list of agency personnel issued government vehicles. Secure copies of trip tickets and verify if employees entitled to RATA had actually used government vehicles. See to it that the proportionate amount of TA is deducted from the monthly TA.

C VR

2.2

C EO C EO VR

2.3

2.4 2.5

VR C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.6

Verify if payroll totals are recorded in the proper expense account classification. Prove the footings and crossfootings of the payrolls. In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). Compare statement presentation with GAAP and NGAS.

VM PD C C VR

2.7 2.8

3.1

VM PD PD

3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

24. Rent Expenses NAME OF AGENCY

AUDIT PROGRAM FOR THE PERIOD ________________ RENT EXPENSES ( Account Code 782 )

Account Description: This account is used to record rental fees for the use of facilities or equipment; and cost for the use of offices and grounds, quarters of personnel, arsenal, barracks, warehouses, office machines, and other equipment. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Check Disbursements Journal (CDJ). 1.3 Prove the accuracy of footings of the GL.

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.4 Check the accuracy of the footings of the CDJ and Report of Report of Checks Issued (RCI). 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether expenses are incurred in connection with rental of facilities or equipment as well as offices and grounds, quarters or personnel, arsenal, barracks, warehouses, office machines and other equipment. 2.2 Check whether the vouchers were approved by the proper authorities. 2.3 Examine authenticity and regularity of supporting documents which include, among others, the following: contract. owner. 2.4 Review the rates of rentals if it conforms to the rates prevailing in the locality. 2.5 Conduct inspection to verify extent of use of leased properties. In case of leased premises, verify if private persons are doing business therein and see that rentals are paid to the agency. Bill of the lessor/property Approved rental/lease

C EO VR

EO VR C EO VR

C VR C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.6

Review computation and see that the rates are in accordance with those prescribed in the contract.

C VR C VR

2.7 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Register of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.8 Check the validity of the amount charged. 2.9 Verify related accrual accounts. See that expenses are properly matched in the period of its incurrence. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

C C VM VM PD PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

25. Repairs and Maintenance (Government Equipment and Motor Vehicles)

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________

REPAIRS and MAINTENANCE - ___________ ( Account Code ) Account Description: This account is used to record cost of repairs and maintenance of government equipment and motor vehicles.

Audit Objectives: 1 2 3 To ascertain the completeness and correctness of the account balances as recorded in the books. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. adequately

To determine whether the recorded accounts are properly classified and presented in the FS and disclosures are adequate.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). 1.3 1.4 Prove the accuracy of footings of the GL. Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements/Report of check Issued (RD/RCI).

C EO C

C C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.1 Obtain from Management a schedule of the Repairs and Maintenance: and the Gasoline, Oil and Lubricants accounts showing the following information: Plate No. Brand/Type Year/Model Mode of Acquisition Assigned To (Official, Office) Repair Frequency Amounts (For R and M and GOL) Charged To (MOOE of Project) Remarks (Audit Observations)

C EO VR

2.2 Check accuracy of the amounts provided by Management by reconciling totals against the General Ledger account. Let Management explain discrepancies, if any, to facilitate the tracing of possible errors in the schedule provided. Validate explanation. 2.3 Conduct ocular inspection on the existence and ownership of the vehicles repaired. 2.4 Analyze schedule as to frequency/ reasonableness of repairs done, in relation to the other information provided by Management (2.1).

C EO

EO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.5 On the basis of the auditors analysis (2.2 to 2.4) or in accordance with an approved sampling plan, obtain samples of disbursement vouchers (DV) for substantive testing. 2.6 Examine DVs and supporting documents and verify whether the expenses incurred for repairs and maintenance of government equipment and motor vehicles are valid expenditures and properly classified in the FS by performing the following: Check whether proper authorities approved the vouchers and the requests for repair of equipment or motor vehicles. Obtain the inventory of equipment and motor vehicles and check whether the equipment or motor vehicles repaired are incurred among the inventory. Check against list of vehicles inspected by the audit team (2.3). Check whether waste material reports were submitted for the replacement of spare parts.

C EO VR

EO VR

C EO

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.7 Examine the authenticity and regularity of supporting documents which include, among others, the following: Request for Repair Pre-Repair Inspection Complete statement of repair to works to be done Bidding/ Canvass documents as the case maybe Warranty certificate of the contractor Approved Job Order Report of Accomplishment Acceptance and Inspection Report

C EO VR

2.8 In the case of NGAs and LGUs, review the related Obligations Slips (ALOBS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.9 Take note of extraordinary repairs and maintenance expenses that prolonged the useful life of the asset; hence, should be capitalized. 2.10 Check the validity and propriety of the amount charged and review computation. Verify accuracy of accounting entries. 2.11 With the assistance of the TSO personnel, evaluate the extent of the repairs done against the contract.

C VR

VM PD

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.12 Take note of deficiencies, if any, and check if these deficiencies would materially affect the accuracy of the Repairs and Maintenance (R and M) account. Moreover, verify if these misstatements in the R and M account, in combination with the m misstatements in other accounts could have a material impact on the financial statements. 3.1 Compare statement presentation with GAAP and NGAS.

C VM PD

VM PD PD

3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

26. Repairs and Maintenance (Government Facilities)

NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ REPAIRS and MAINTENANCE - ___________ ( Account Code )

Account Description: These accounts are used to record repairs and maintenance of government facilities. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance / FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ).

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of Checks Issued (RCI). Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether the expenses are incurred for repairs and maintenance of government buildings and other similar facilities. Check whether the vouchers were approved by the proper authorities. Ascertain the ownership of building and similar facilities. the

C C

2.1

C EO VR

2.2 2.3

EO VR EO VR EO VR C EO VR EO VR

2.4 Verify the authority to undertake the repair or maintenance work. 2.5 Examine the program of work and detailed cost estimate as approved by proper authorities with the assistance of the TSO personnel.

2.6 Look into the mode of procurement of repair and maintenance work: By Administration: See that proper authorities approve the contract.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Ascertain that pertinent laws, rules and regulations are complied with. See that authorities, if any, approve extension work. C EO VR C EO VR

2.7 Ascertain that the accomplishment report is submitted. 2.8 Examine the authenticity and regularity of supporting documents which include, among others, the following: 2.9 Request for repair Pre-repair Inspection Complete Statement of the Work to be done. Certificate of Accreditation (issued by the Department of Trade and Industry). Bidding/Canvass documents, as the case may be Warranty certificate of the contractor Approved Job Order Report of Accomplishment Acceptance and Inspection Report

In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Register of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO). Take note of extraordinary repairs and

C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

maintenance expenses that prolonged the useful life of the asset; hence should be capitalized. 2.10 Check the validity of the amount charged and review computation. 2.11 With the assistance of the TSO personnel, evaluate the extent of repairs done against the program/contract. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM. C C EO

VM PD PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

27. Salaries and Wages Casual/Contractual NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SALARIES and WAGES CASUAL/CONTRACTUAL ( Account Code 705 / 706 )

Account Description: This account is used to record the pay proper of casuals and contractual government employees for services rendered. Audit Objectives: 1. To ascertain the accuracy/completeness and correctness of the account balances as recorded in the books. 2. To ascertain that payments of salaries and wages are made to duly appointed casual/contractual employees properly authorized, documented and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1. Trace the account balance in the trial balance/FS to the General Ledger (GL). 1.2. Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ).

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3 Prove the accuracy of footings of the GL. 1.4 Check the entries in the CDJ with the Report of Disbursements (RD) prepared by disbursing officers and paid payrolls. 1.5 Check the accuracy of the footings of the CDJ and RD. 2.1 Using the prescribed sampling methods, select samples of paid payrolls for verification. renewal of appointments, resignations, contract of services, etc. from the Personnel Office.

C EO

C C EO C EO VR C EO

2.2 Obtain copies of appointment papers,

2.3 Check the names appearing on the


sample payrolls against the appointment papers and other related documents on file to assure that all names listed on the payrolls belong to the employees of the agency.

2.4 Scrutinize

employees, signature. Compare them with those on the oath of office or on payroll sheets for other periods. the sample payroll with appointment documents/contract of service.

EO VR

2.5 Compare pay rate of each personnel in

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.6 Verify whether changes in payroll

data such as new hires, separations/ deletions and changes in rates of pay and deductions are fully documented and authorized. and allowances granted to casual/contractual employees are authorized pursuant to existing rules and regulations.

C EO VR

2.7 Verify whether additional compensation

VR

2.8 Reconcile

data on reports of attendance/daily time records with logbook and record of leave to determine if absences and undertimes of casual/contractual employees are deducted from either payroll or leave credits. employees contributions/ withholding /deductions on payrolls by referring to the tax tables and employees deduction declaration forms. pay amounts to ascertain correctness of payments made.

C EO

2.9 Check

C VM

2.10 Verify accuracy of the individual net

2.11 Verify whether unclaimed salaries and


wages are excluded from payroll totals and properly recorded under payable account

C VM

2.12 Verify footings and cross-footings of


the payroll.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.13 Trace samples to the individual index


cards of salary payments maintained by the Accounting Department to check for possible double payments.

2.14 Verify if payroll totals are recorded in


the proper expense account classification.In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement presentation with GAAP and NGAS.

C VR

VM PD PD

3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

28. Salaries and Wages Part Time NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SALARIES and WAGES PART TIME ( Account Code 703 )

Account Description: This account is used to record the pay proper of part-time government employees for services rendered. Audit Objectives: 1 2 3 To ascertain the completeness and correctness of the account balances as recorded in the books. To ascertain that payments of salaries and wages to part time employees are properly authorized, documented and services actually rendered. To determine whether the recorded accounts are properly classified and presented in the FS.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balance in the trial balance/FS to the General Ledger (GL).

C Eo

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.2 Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of footings of the GL. 1.4 Check the entries in the CDJ with the Report of Disbursements (RD) prepared by disbursing officers to support liquidation of their cash advances and paid payrolls.

C C

1.5 Check the accuracy of the footings of the CDJ and RD. 2.1 Using the prescribed sampling methods, secure payrolls for payment of part time services. Verify if payments made are supported by the following documents; a. authority to collect part time pay b. certification of services rendered c. copy of the contract, if any, between the agency and the payee if the latter is not an employee of the agency. d. accomplishment report 2.3 Check the pay rate of each personnel with the authority or contract of service. Check mathematical computations of withholding taxes by using the applicable tax rates.

C C EO C EO VR

2.2

C EO C

2.4

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.5

Recompute the individual net pay amounts to ascertain correctness of payments made. Prove the accuracy of footings and cross-footings of the payroll. Verify if payroll totals are recorded in the proper expense account classification in the GL. In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS).

2.6 2.7

C VM

2.8

C VR

3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

VMP D PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

29. Salaries and Wages Regular NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SALARIES and WAGES REGULAR ( Account Code 701 ) Account Description: This account is used to record the pay proper of regular government employees for services rendered. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain whether payments of salaries and wages to regular employees are made to duly appointed employees of the agency and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement (VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1

Trace the account balance in the FS/trial balance to the General Ledger (GL). Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ).

C EO

1.2

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.3

Prove the accuracy of footings of the GL. For salaries paid out of cash advances, check the entries in the CDJ with the total of the Report of Disbursements (RD) prepared by disbursing officers and paid payrolls. For salaries paid through Automated Teller Machine (ATM), check the entries in the GJ with the total of approved payrolls for the period and debit memos from the bank. Check accuracy of the footings of the CDJ and RD.

1.4

1.5

1.6

1.7 Using the prescribed sampling method, select samples of paid payrolls for verification. 2.1 Obtain copies of the latest appointment papers; salary adjustment notices; list of retirements, resignations, transfers and deaths; administrative charges and fines; etc. from the Personnel Office. 2.2 Check the names and designations appearing on the sample payrolls against the latest appointment papers and other related documents on file to assure that all names listed on the payrolls belong to the employees of the agency.

C EO C EO VR

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.3 For salaries paid out of cash advances, scrutinize employees signature on the payroll. Compare them with those on the oath of office or on payroll sheets for other periods. In case of salaries drawn by persons other than the employee, see to it that the same is covered by proper authorization. 2.4 Compare pay rate of each personnel in the sample payroll with the latest appointment documents/salary adjustment notices on file. Verify whether changes in payroll data such as new hires, separations / deletions and changes in rates of pay and deductions are fully documented and authorized. 2.5 Verify whether additional compensation and allowances granted are authorized pursuant to existing rules and regulations. Reconcile data on reports of attendance/daily time records with logbook and record of leave to determine if absences and undertimes are deducted from either payroll or leave credits.

EO VR

C EO VR

VR

2.6

C EO

2.7 Checks leave commutation for possible double payments. 2.8 Check employees contributions/ withholdings/deductions on payrolls by reference to the tax

C C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

tables and employees declaration forms.

deduction C

2.9 Recompute individual net pay amounts to ascertain correctness of payments made. 2.10Verify whether unclaimed salaries and wages are excluded from payroll totals and properly recorded under payable account. 2.11 Prove footings and cross footings of the payrolls. 2.12 Trace samples to the individual index cards of salary payments maintained by the Accounting Department to check for possible double payments. 2.13 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.1 Take note of deficiencies, if any. Prepare and issue AOM.

C C

C VR

VM PD PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

30. Security and Janitorial Expenses NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SECURITY/JANITORIAL EXPENSES ( Account Code 797/796 ) Account Description: This account is used to record the cost of security/janitorial services contracted by the agency. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and services actually rendered.. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Check Disbursements Journal (CDJ). 1.3 Prove the accuracy of footings of the GL.

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

C 1.4 Check the accuracy of the footings of the CDJ and Report of check Issued (RCI). 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether the expenses are incurred in connection with procurement of janitorial or security services. C EO VR

2.2 Check whether the vouchers were approved by the proper authorities. 2.3 Verify whether the agency has taken note of the following in the evaluation of the offers for security or janitorial services: Track records of security or janitorial firm Cost estimates Wages are in accordance with labor laws. Cost of supplies and equipment to be used Schedule of hours of service

EO VR C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.4 Examine authenticity and regularity of supporting documents which include, among others, the following: Bid documents Approved contract Letter of award Approved contract

C EO VR

Letter of award Accomplishment Report C VR

3.1 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Register of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO). 3.1 3.2 Compare statement presentation with GAAP and NGAS. Check whether the account is properly classified and presented as operating expense under MOE in the FS. Take note of deficiencies, if any. Prepare and issue AOM.

VM PD PD

3.3

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

31. Subsidies and Donations NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SUBSIDIES and DONATIONS ( Account Code 871 - 878 ) Account Description: This account is used to record all non-repayable transfers of funds and property given to other levels of government, private sector, non government organizations, or international institutions and other funds. Grants encompass reparations and gifts given for particular projects or programs, general budget support or for any other purposes. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). 1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of check Issued (RCI). 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine the nature of expense to ensure it was incurred for lawful public purpose. 2.2 Examine the authenticity and regularity of supporting documents and check whether they contain the following information: List of persons or official designation of persons granted grants or donations. Purpose of grants and donation Authority for the grant, when necessary Acknowledgment Receipt of grantees/donees

C EO C

C C

C EO VR

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.3 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.4 Determine whether the total amount of expenses does not exceed the amount

C VR

authorized by existing law, rules and regulations. 2.5 Check the validity of the amount charge and review computation. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.2 Take note of deficiencies, if any. Prepare and issue AOM C VM PD PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

32. Subsidy To National Government Agencies ( 871 ), Subsidy To Local Government Units ( 874 ), Subsidy To Government Corporations ( 875 ) and Subsidy To Other Funds ( 877 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ SUBSIDY TO ___________________________ ( Account Code ) Account Description: The account Subsidy to National Government Agencies is used to record the amount transferred to NGAS pursuant to a provision of law, memorandum of agreement, etc. The account Subsidy to Local Government Units is used to record financial assistance granted to a government unit for the purpose of pursuing programs or policies of public interest. The account Subsidy to Government Corporations is used to record financial assistance granted to a government-owned controlled corporations to cover operational expenses that are not supported by corporate revenues or to cover corporate deficit and losses. The account Subsidy to Other Funds is used to record in the General fund (GF) books amount transferred to Special Education Fund (SEF) as aids or contribution. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented and disclosures are adequate. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the entries in the General Journal and Journal Entry Voucher. 1.3 Prove the accuracy of footings of the GL. 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine the nature of the expense to ensure it was incurred for a lawful public purpose. Check whether the vouchers were approved by the proper authorities.

C Eo C

C C EO VR

2.2

EO VR C EO VR

2.3 Examine the authenticity and regularity of supporting documents, which may include, among others, the following: Subsidy to National Government Units/ Subsidy to Government Corporations/ Subsidy to Local Government Units Memorandum of Agreement Sanggunian approval by way of resolution.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.4 For the accounts Subsidy to Other Funds and Subsidy to Special Accounts, check inclusion in the Appropriations Ordinance or Approved Supplemental Budget. 2.5 In the case of NGAs and LGUs, review the related OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.6 Check the validity of the amount charge and review computation. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Check whether appropriate of disclosures on the account are stated in the Notes to FS. 3.4 Take note of deficiencies, if any. Prepare and issue AOM.

C EO VR

C VR

C VM PD PD

PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

33. Subsistence, Laundry and Quarters Allowances ( 716 ), Hazard Pay ( 721 ), Health Workers Benefits ( NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ ___________________________ ( Account Code )

Account Description: Subsistence and Quarters Allowances account, on the other hand, is used to record subsistence and quarters allowances given to government officials and employees. The account Hazard Pay is used to record compensation paid to employees who are working or assigned in difficult, dangerous, strife-torn or embattled areas as certified by the Department of National Defense, and whose lives are directly exposed to work conditions which may cause injury, sickness or death or harmful change in the human organism, such as: exposure to harmful chemicals, wastes and pollutants, microorganisms and other harmful elements, or situations that endanger life or health as certified by authorized government agency.

Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain whether payments of Hazard Pay, Health Workers Benefits and Subsistence and Quarters Allowance are properly authorized, documented and services actually rendered. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balance in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL. 1.4 Check the entries in the CDJ with the Report of Disbursements (RD). 1.5 Check the accuracy of the footings of the CDJ and RD. 2.1 Using the prescribed sampling method select samples of paid payrolls for subject allowances. From the Personnel Office, obtain list of agency officials and employees authorized to receive such allowances and the amount of benefits they are entitled. Check the names and rate of allowances appearing on the sample payrolls against the list provided by Personnel Office. Verify if the amounts paid are at authorized rate as provided by applicable laws, rules and regulations.

C EO C

C C C C EO C EO VR

2.2

2.3

C EO

2.4

C VR C VM

2.5 Prove the accuracy of footings and crossfootings of the payroll. 2.6 Verify if payroll totals are recorded in the proper expense account

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

classification in the JCD and GL. 2.7 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM. C VR

VM PD PD

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

34. Supplies and Materials Expenses Medical, Dental and Laboratory Supplies Expenses ( 760 ); Food Supplies Expenses ( 758 ); Gasoline, Oil and Lubricants Expenses ( 761 ) and Agricultural Supplies Expenses ( 762 ) NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ ___________________________ ( Account Code )

Account Description: The account Medical, Dental and Laboratory Supplies expense is used to record the cost of medicines and other medical, dental and laboratory supplies used during the accounting period. The account Food/Non-Food expense is used to record expenses for food, clothing and other maintenance needs of patients in hospital, center, sanitarium and inmates in penitentiary/sanitarium including those distributed to people affected by calamities/disasters/ground conflict. All purchases of perishable items shall be recorded as an expense under this account. The account Gasoline, Oil and Lubricants expense is used to record the cost of gasoline, oil and lubricants consumed by government vehicles and other equipment in connection with government operations and projects. The account Agricultural Supplies expense is used to record the cost of fertilizers, pesticides and agricultural supplies issued in connection with government operations and projects. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and goods actually delivered. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ) , Presentation and

Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1

Trace the account balances in the trial balance/FS to the General Ledger (GL). Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). Prove the accuracy of footings of the GL. Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of Checks Issued (RCI).

C EO C

1.2

1.3 1.4

C C

2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether the expenses are for expendable commodities used in government operations. 2.2 Check whether the vouchers were approved by the proper authorities. 2.3 Examine authenticity and regularity of supporting documents which include, among others, the following: Medical, Dental and Laboratory Supplies/Food/Non-Food Expenses,

EO VR C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Agricultural Supplies Expenses Bidding/Canvass Supplies Availability Inquiry. Purchase Request. Bid/Canvass documents such as Invitation to Bid, Bidders Bonds, Bid Tenders, Abstract of Canvass/ Bids. Resolution/Letter of Award. Purchase Order Performance Bond Delivery Receipt Acceptance and Inspection Report Official Receipt C EO VR

Negotiated Purchase Supplies Availability Inquiry. Purchase Request. Bids Documents such as Invitation to Bid, Bidders Bond, Bid Tenders, Abstract of Canvass/Bids. Certification of failure of public bidding twice. Purchase Order approval of the negotiated purchase by proper authorities. Resolution/Letter of Award Performance Bond. Delivery Receipt Acceptance and Inspection Report. Official Receipt.

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Repeat Order (may be availed of within 6-month period from the date of original purchase and the original purchase was made thru public bidding) Supplies Availability Inquiry. Purchase Request (Quantity per PR does not exceed 100% of the original purchase) Original Bid Documents Purchase Order Performance Bond Delivery Receipt Acceptance and Inspection Report Official Receipt

C EO VR

Exclusive Distributor Supplies Availability Inquiry. Purchase Request Certificate of Exclusive Distributorship and Certificate that there are no sub-dealers selling at lower prices and that no substitute are available. Purchase Order. Performance Bond. Delivery Receipt. Acceptance and Inspection Report. Official Receipt. C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

Emergency Purchase Supplies Availability Inquiry Purchase Request Canvass Documents Certificate of Emergency Purchase Purchase Order Report of Utilization. Confirmatory Report on Emergency Purchase. Delivery Receipt Acceptance and Inspection Report Official Receipt

C EO VR

For Gasoline, Oil and Lubricants Expenses Purchase Request Bid Documents Purchase Order Approved Trip Tickets Report of Gasoline Consumption Official Receipt

C EO VR

2.4 In case of expenses for medical, dental and laboratory supplies, verify authenticity of test results and certification from the Bureau of Food and Drugs Administration.

VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.5 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Register of

C VR

Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.6 Verify if procured items are included in the Annual Procurement Program or Amendatory/ Supplemental Procurement Program. 2.7 Check the validity of the amount charged and review computation. 2.8 Compare statement presentation with GAAP and NGAS. VR

C VM PD PD

3.1 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.2 Take note of deficiencies, if any. Prepare and issue AOM.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

35. Terminal Leave Benefits NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ TERMINAL LEAVE BENEFITS ( Account Code 742 ) Account Description: This account is used to record payment for the money value of the total accumulated leave credits of government officials and employees upon retirement or voluntary separation. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that payment of Terminal Leave Benefits are properly authorized, adequately documented and services actually rendered.. 3. To determine whether the recorded accounts are properly classified and presented in the FS Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash Disbursements Journal (CDJ). 1.3 Prove the accuracy of the GL.

C EO C

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.4 Check the entries in the CDJ with the disbursement vouchers. 1.5 Check the accuracy of the footings of the CDJ.

C C C EO VR C EO VR

2.1 2.2

Secure disbursement vouchers for payment of Terminal Leave Benefits. Verify if the claims are supported by the following documents: Approved application for leave. Complete service records. Clearance from money, property and legal accountability. Ombudsman clearance. Statement of Assets and Liabilities. Copy of last appointment. If due for retirement, copy of appointment showing highest salary received if salary under last appointment is not the highest.

2.3

Reconcile the records of the Personnel Office for unused vacation leave and/or sick leave with the records being maintained by the Accounting Office to ascertain the accuracy of accumulated leave credits. Recompute terminal leave benefits due the claimant/retiree. In the case of NGAs and LGUs, review the related Obligations Slips

C EO VR

2.4 2.5

C C VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

(OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Personal Services (RAAOPS). 3.1 Compare statement presentation with GAAP and NGAS. VM PD PD

3.2 Check whether the account is properly classified and presented as operating expense under PS in the FS. 3.3 Take note of deficiencies, if any.

PREPARED BY :

REVIEWED BY :

APPROVED BY :

Date

Date

Date

36.

Training and Scholarship Expenses NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ TRAINING/SCHOLARSHIP EXPENSES ( Account Code 753 / 754 )

Account Description: This account is used to record expenses incurred for participation/attendance of personnel to training, conferences and seminar workshops. It also includes expenses incurred related to training such as payment of honoraria to lecturers, handouts given, supplies and materials used, etc. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), presentation and Disclosure ( PD ) ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL).

C EO

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

C 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). C C

1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of Checks Issued (RCI). 2.1 Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether the expenses are incurred in connection with participation/attendance of personnel to training, conferences and seminar workshops and whether related expenses such as payment of honoraria to lecturers, hand outs given, supplies and materials used, etc., are incurred incidental thereto. 2.2 Check whether the proper authorities approved the vouchers.

C EO VR

EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.3 Examine the authenticity and regularity of the supporting documents which include, among others the following: For attendance to training, conferences and seminar-workshop: Authority to attend training, conference or seminar-workshop Approved itinerary of travel For expenses related to training such as payment of honoraria to lecturers, handouts given, supplies and materials used, etc. Approved program for training, conferences and seminar-workshop Appropriately accomplished and approved payroll of speakers Approved procurement documents for handouts supplies and materials, etc. used in the conduct of training, conference and seminar-workshop Official receipts acknowledging payment

C EO VR

2.5 In the case of NGAs and LGUs, review the related OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.6 Check the validity of the amount charged and review computation. 3.1 Compare statement presentation with GAAP and NGAS.

C VR

C VM PD

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

3.2

Check whether the account is properly classified and presented as operating expense under MOE in the FS. Take note of deficiencies, if any. Prepare and issue AOM. REVIEWED BY : Date

PD

3.3

PREPARED BY : Date

APPROVED BY : Date

37. Travelling Expenses Local and Foreign NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ TRAVELLING EXPENSES Local/ TRAVELLING EXPENSES - Foreign ( Account Code 751 / 752 )

Account Description: Traveling Expense Local account is used to record expenses incurred in the movement of persons within the Philippines whether employed in the government or not such as: transportation, travel per diems, hire of guides or patrol; ferriage; steamship fares; tips, airport fees, porter fees, transfer, etc. of persons while on official travel; charter of boats, launches, cars, road tolls, parking fees and all other similar expenses. Traveling Expense Foreign account is used to record expenses incurred in the movement of persons outside the Philippines whether employed in the government or not such as: transportation, travel per diems, hire of guides or patrol; ferriage; transportation of personal baggage or household effect, bus, railroad, airline and steamship fares; tips, airport fees, porter fees, transfer, etc. of persons while on official travel; charter of boats, launches, cars, road tolls, parking fees and all other similar expenses. Audit Objectives:

1.

To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS. Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Cash/Check Disbursements Journal (CDJ/CkDJ). 1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ/CkDJ and Report of Disbursements (RD)/Report of Checks Issued (RCI). Secure samples of Disbursement Vouchers (DV) in accordance with the approved sampling plan. Examine DVs and supporting documents and verify whether the expenses incurred for travel of officials and employees of the government are properly authorized and are paid in accordance with prescribed rates.

C EO C

C C

2.1

C EO VR

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.2 Check whether the proper authorities approved the vouchers. 2.3 See if the voucher for travel is supported by travel order and itinerary of travel approved by proper authorities. Check whether extension of travel, if any, is properly authorized and covered by approved travel order. In the case of NGAs and LGUs, review the itinerary of the claimant as to the time of departure from the official station and arrival at point of destination. Note unauthorized stopover or side trips, which are not to be considered as part of official travel.

EO VR C EO VR

2.4

2.5 Examine the authenticity and regularity of other supporting documents such as certificate of appearance, reimbursement expense receipts, tickets, etc. 2.6 Review the related Obligation Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO).

C EO VR

C VR

2.7 Check the validity of the amount charged and review computation. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

C VM PD PD

PREPARED BY : Date 38.

REVIEWED BY : Date

APPROVED BY : Date

Utility Expenses - Water/ Electricity NAME OF AGENCY AUDIT PROGRAM FOR THE PERIOD ________________ WATER / ELECTRICITY EXPENSES ( Account Code 766 / 767 )

Account Description: The account Water expense is used to record the cost of water used/consumed in government facilities in connection with government operations and projects. The account Electricity expense is used to record the cost of electric power or illumination used/consumed in government facilities in connection with government operations and projects. Audit Objectives: 1. To ascertain the completeness and correctness of the account balances as recorded in the books. 2. To ascertain that the expenses incurred are valid, properly authorized, documented and actually incurred. 3. To determine whether the recorded accounts are properly classified and presented in the FS.

Assertions: Completeness ( C ), Existence or Occurrence ( EO ), Validity/Legality or Regularity ( VR ), Valuation and Measurement ( VM ), Presentation and Disclosure ( PD )

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

1.1 Trace the account balances in the trial balance/FS to the General Ledger (GL). 1.2 Reconcile postings in the GL with the monthly totals of the Check Disbursements Journal (CDJ). 1.3 Prove the accuracy of footings of the GL. 1.4 Check the accuracy of the footings of the CDJ and Report of Checks Issued (RCI).

C Eo C

C C

2.1 Secure Disbursement Vouchers supporting documents and verify whether expenses are incurred for water or electric power/illumination in government facilities in connection with its operations and projects. 2.2 Check whether the vouchers were approved by the proper authorities. 2.3 Examine the authenticity and regularity of the supporting documents such as water/electric bills, official receipts, etc. 2.4 Secure/Prepare schedule of consumption. Inquire for significant increases in consumption. 2.5 Test check bills presented by comparing meter reading as shown in the current bills against the preceding bills.

C EO VR

EO VR C EO VR C EO VM C VM

ASSERTIONFS

AUDIT PROCEDURES

TIME FRAME TO BE DON E BY DATE START ED DATE COMPLE TED REMAR KS

WP Ref

2.6 Conduct verification to determine if the consumption paid for are purely for public purpose. 2.7 In the case of NGAs and LGUs, review the related Obligations Slips (OS). Trace OS to the Registry of Appropriations, Allotment and Obligations Maintenance and Other Operating Expenses (RAAMO). 2.8 Check the validity of the amount charged and review computation. 3.1 Compare statement presentation with GAAP and NGAS. 3.2 Check whether the account is properly classified and presented as operating expense under MOE in the FS. 3.3 Take note of deficiencies, if any. Prepare and issue AOM.

VR

C VR

C VM PD PD

PREPARED BY : Date

REVIEWED BY : Date

APPROVED BY : Date