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Annex A



The conduct of government audit shall conform to the auditing standards comprised of
the following:

General Standards
Field Work Standards
Reporting Standards
Quality Control Standards

General Standards
1.1 The audit shall be performed by a person possessed with adequate technical training
and proficiency as auditor.
1.2 In all matters relating to the audit work, the auditor shall maintain complete
independence, impartiality and objectivity, shall avoid any possible compromise of his
independence or any act which may create a presumption of lack of independence or
the possibility of undue influence in the performance of his duties.
1.3 The auditor shall exercise due professional care and be guided by applicable laws,
regulations and the generally accepted principles of accounting in the performance of
the audit work as well as in the preparation of audit and financial reports.

2. Field Work Standards

2.1 The audit work shall be adequately planned and assistants shall be properly supervised.
2.2 A review shall be made of compliance with legal and regulatory requirements.
2.3 An evaluation shall be made of the system of internal control and related
administrative practices to determine the extent they can be relied upon to ensure
compliance with laws and regulations and to provide for efficient, economical and
effective operations.
2.4 Audit opinions, conclusions and recommendations shall be based on sufficient
competent evidential matter obtained through inspections, observations, inquiries,
confirmation and other techniques.

3. Reporting Standards
3.1 Audit opinions in the Annual Audit Reports (AARs) shall be dated, signed manually
and shall be issued in the manner provided by the regulations of the Commission.
3.2 AARs shall include the Audited Financial Statements, findings and recommendations.
3.3 Audit reports shall meet the following reporting criteria:
3.3.1 Factual matter must be accurately, completely and fairly presented.
Findings must be presented objectively and in language as clear and simple
as the subject permits.
Findings must be adequately supported by evidence in the audit working
3.3.4 Reports must be concise yet complete enough to be understood by the users.
Information on underlying causes of problems must be included so as to
assist in implementing or devising corrective actions.
3.4 Audit reports shall:

Put primary emphasis on improvement; present critical comments in

balanced perspective; recognize unusual difficulties or circumstances faced by
officials concerned.
Identify and explain issues and questions needing further study and
consideration by the auditor, the agency and others.
Include recognition of noteworthy accomplishments particularly when
management improvements in one area or activity may be applied elsewhere.
Include recognition of the views of responsible officials of the audited
agency on the auditors findings, conclusions, and recommendations. Except
where the possibility of fraud or other compelling reason may require
different treatment, the auditors tentative findings and conclusions should be
reviewed with officials. When possible, without undue delay, their view
should be obtained in writing and objectivity considered and presented in the
final report.

4. Quality Control Standards

4.1 The Auditor shall establish a system of quality control for audits and reviews of
historical financial information, and for other assurance and related services
engagements, in conjunction with the code of ethics.
4.2 The auditor shall implement and monitor the system of quality control to provide
reasonable assurance that he and his staff comply with professional standards and
regulatory and legal requirements, and that reports issued are appropriate in the

4.3 The auditors should ensure that audit tasks are carried out to an acceptable level of
quality by observing the above enumerated General, Field Work and Reporting
4.4 An independent higher level quality control standards review of audit tasks to
establish compliance with the above standards and ensure that work is carried out to an
acceptable level of quality shall be undertaken by competent personnel not involved in
the audits subject for review, in consultation with those involved in the audit.