Table of Contents

1. ORGANISATION AND PURPOSE OF THE MANUAL 1.1 Purpose of the Audit manual 1.2 Types of audits dealt with 1.3 Audit entities dealt with 1.4 Accounting Responsibility Structure of the Government of Pakistan 1.5 Stages of audit work dealt with 1.6 Organisation of the manual 1.7 Links to other guidance material 1.8 Standard audit working paper kit 1.9 Need for professional judgment 1.0 Updating the Audit Manual 2. ROLE OF THE AUDITOR GENERAL 2.1 Parliamentary Control and Public Accountability 2.2 Introduction to Auditing 2.3 Legislative Basis 2.4 Vision, Mission and Values 3. THE JOB OF THE AUDITOR 3.1 Expectations 3.2 Conditions of Employment 3.3 Code of Ethics 3.4 Protection of the Auditor 4. DAGP AUDIT STANDARDS 4.1 Basic Principles in Government Auditing 4.2 General Standards in Government Auditing 4.3 Standards with Ethical Significance 4.4 Field Standards in Government Auditing 4.5 Reporting Standards in Government Auditing 5. DAGP’S ANNUAL PLANNING PROCESS 5.1 DAGP Strategic Audit Objectives 5.2 DAGP Audit Scope 5.3 DAGP Strategic Audit Plans 5.4 The annual planning process 5.5 Integration of audit work 5.6 Approval process for the budget of centrally-led audits 6. THE AUDIT CYCLE 6.1 Introduction 6.2 General audit planning 6.3 Activity and Resource Planning 6.4 Roles and responsibilities 7. PLANNING THE AUDIT 7.1 Step1 – Establish audit objectives and scope 7.2 Step 2 –Understand the entity’s business 7.3 Step 3 – Assess materiality, planned precision, and audit risk 7.4 Step 4 – Understand the entity’s internal control structure
Audit Manual – Table of Contents

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7.5 Step 5 – Determine components 7.6 Step 6 – Determine financial audit and compliance with authority objectives, and error/irregularity conditions 7.7 Step 7 - Assess inherent risk and control risk 7.8 Step 8 – Determine mix of tests of internal controls, analytical procedures and substantive tests of details 7.9 Reliance on other auditors 7.10 Documenting strategic planning decisions 7.11 Application to Government-wide Audits 8. ACTIVITY AND RESOURCE PLANNING FOR INDIVIDUAL AUDITS 8.1 Formulate/update Audit Programmes 8.2 Updating staffing requirements and allocating resources 8.3 Updating budget requirements 8.4 Updating timing considerations 8.5 Updating information required from the entity 8.6 Re-assessing the general and detailed planning decisions for individual audit 8.7 Documenting the detailed planning decision 8.8 Updated planning file 8.8 Approval of the general and detailed planning decisions 9. CONDUCTING THE AUDIT 9.1 Introduction 9.2 Compliance Testing 9.3 Substantive Testing 9.4 Evidence 9.5 Matters to deal with during fieldwork 9.6 Cause and Effect Analysis 9.7 Developing Conclusions and Recommendations 9.8 Keeping entity official informed 9.9 Documenting the work performed 9.10 Custody and maintenance of working paper files 9.11 Quality assurance during field work 10. EVALUATING AUDIT RESULTS 10.1 Evaluating Financial Audit Results 10.2 Known errors, most likely errors, further possible errors and maximum possible errors 10.3 Determining the cause of errors, violations and deviations 10.4 Concluding on the on the results of each test 10.5 Concluding on the results of each component 10.6 Concluding on the financial statements as a whole 10.7 Dealing with unacceptable results 10.8 Dealing with acceptable results 10.9 Documenting the evaluation process 10.10 Evaluating Regularity Audit Results 10.11 Quality assurance during the evaluation phase 11. THE REPORTING PROCESS 11.1 Introduction 11.2 Focus on the Reporting Process 11.3 Clearing Observations, Conclusions and Recommendations

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Audit Manual – Table of Contents

11.4 Obtaining Management Responses 11.5 Management representation letter 11.6 Audit completion checklist 11.7 Producing the Audit Report 11.8 Review of reports by others 12. THE AUDIT REPORT 12.1 Introduction 12.2 The Certification Report and Types of Opinion 12.3 Audit reports other than opinions on financial statements 12.4 Reporting style and format 12.5 Compliance and Performance Reports 13. DOCUMENTATION AND WORKING PAPERS 13.1 The Need for Documentation and Working Paper Files 13.2 The Purpose of Working Paper Files 13.3 The Quality of Working Paper Files 13.4 Custody and Maintenance of the Working Paper Files 14. AUDIT FOLLOW UP 14.1 Introduction 14.2 Timing of the follow up 14.3 Determining the desired level of assurance 14.4 Performing the follow up 14.5 Reporting the results of the follow up 14.6 Performing additional follow ups 15. QUALITY ASSURANCE 15.1 Introduction 15.2 General quality assurance techniques described in this manual 15.3 Quality assurance during the planning phases for individual audits 15.4 Quality assurance during the fieldwork phase for individual audits 15.5 Quality assurance during the evaluation phase 15.6 Quality assurance during the reporting phase 15.7 Quality assurance during the follow up phase 15.8 Other quality assurance procedures

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List of Appendices
Appendix A: Glossary of Terms Appendix B: Statistical and Non-Statistical Sampling and the Use of CAATs Appendix C: Computer Assisted Auditing Techniques (CAATs) Appendix D: Assurance and Materiality Appendix E: Analytical Methods Appendix F: Interviewing A-1 B-1 C-1 D-1 E-1 F-1

Audit Manual – Table of Contents

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