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

TIME
AUDIT FRAME
TO
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PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

1.1 Trace the FS balance to the general C

ledger (GL). EO

1.2 Verify the correctness of postings in the C

GL from the Cash Receipts Journal, EO
Cash Journal and the General Journal.
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BY DATE DATE
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1.3 Determine the total number of Journal

Entry Vouchers (JEV) to be sampled C
using the approved sampling
methodology.

1.4 Check correctness of the entries in the C

JEV from the Report of Collections EO
and Deposits and the source
documents.

1.5 Analyze income account for propriety C

of credits. EO

1.6 Review the general ledger account. C

Trace entries in the account through
the journals to the underlying Report
of Collections and Deposits (RCD).

1.7 Verify the correctness of vertical and C

horizontal footings of the RCD by
running an independent tape.

1.8 Trace transcription of the data from the C

official receipt to the RCD.

1.9 Trace column totals of the RCD to the C

entries in the Cash Receipts
Journal/Cash Journal.

1.10 Foot the Cash Receipts Journal/Cash C

Journal and trace to the postings in
the general ledger.

1.11 Verify or confirm with the C

bank/Bureau of Treasury the amounts EO
appearing on Remittance Advices as RO
having been deposited with
authorized depository bank/Bureau of
Treasury.
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BY DATE DATE
STARTED COMPLETED

1.12 On sample basis, and whenever

possible, confirm with payees and C
determine correct amount paid. EO
RO
1.13 From the books of accounts, prepare C
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.

1.14 Compare the schedule with the C

earnings of similar past periods.
Check to see that all types of income
due are being recorded.

1.15 Investigate wide fluctuations between C

months and years. Watch for any
exceptional items or those that are
recurrent but not booked up.

1.16 Check to see whether proper cut-off C

for income realized has been
observed.

1.17 Review transactions for a few days C

before and after the end of the
accounting period under audit.

1.18 Check whether earned income for the C

period have been accrued and
recorded in the books.

1.19 Examine any charges/adjustments VR

made to the accounts. See that they VM
are proper and duly authorized.
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BY DATE DATE
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2.1 Examine whether credits to VM

income account are proper and that PD
the account classification is correct
and consistently followed.

2.2 Examine supporting

documents or other basis for credits C
to income for: EO
VR
 regularity RO
 authorization PD
 accuracy
 proper account classification

2.3 Review assessment/bills C

rendered/ collection records to VR
determine if tax laws, ordinances, VM
regulations, etc. are being applied
uniformly and in similar situations as
to:

 rates
 computation
 manner of payment
 penalties, if applicable

2.4 Inquire into the basis or VR

criterion in giving discounts or
exemptions, if any, and its effect on
income target.

2.5 Compare income realized C

against target/projections for the
period. Analyze trend over several
years. Quantify differences.

2.6 Determine causes of C

shortfalls in income generation.
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2.7 Check if increased income VM

was caused by:

 higher rates of income

 more efficient system or effort by
management
 understated estimate/projection of
income

2.8 Look into the agency’s VM

method or basis of estimating income
and see that it is reasonable and
attainable.

2.9 Check if the agency VM

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 of
Total income income realized

2.10 Discuss with management VM

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.
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BY DATE DATE
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3.1 Verify tax due from the order of C

payment: VM

 Check the rates applied against

the rates embodied in the tax
ordinance
 Re-compute the assessment

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

3.3 Secure from the BIR the names of the C

promoters whose tickets have been EO
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.
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3.4 Determine whether tickets have been C

registered with the Treasurer's Office EO
and check their dates of registration,
classes, admission prices and
inclusive serial numbers.

3.5 Secure from the Treasurer’s Office list C

of promoters/operators who are VR
exempted from paying the
amusement tax and the corresponding
exemption certificates from
Sanggunian.

3.6 Verify whether the exemption is in C

accordance with the tax ordinance. If VR
not, determine the amount of revenue
that should have been realized if the
amusement tax is collected.

3.7 From the samples of Official Receipts C

(OR) and Report of Collections and EO
Deposits (RCD). Compare the
amount of taxes due per order of
payment with the amount collected
per OR.

3.8 Check the ORs whether the amount in

words agrees with the amount in C
figures. Take note of any alteration or
erasure and investigate if any.

3.9 See to it that the nature of payment is C

properly indicated in the ORs. EO

3.10 Check the numerical sequence of ORs C

issued. Investigate for the missing
receipts.
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3.11 Ascertain whether all copies of C

cancelled ORs are attached to the
RCD. Inquire for the cause of
cancellation.

3.12 Verify correctness of the Collector’s C

RCD. Ascertain that the RCDs have VR
been duly certified by the collector
and the liquidating officer/treasurer.

3.13 Match collections against deposits to C

establish undeposited collections

3.14 Compare the dates when collections VR

were made/turned over against the
dates of the teller’s validation in the
deposit slip to determine delays in the
deposit of collections.

3.15 Compare the amount of cash and C

checks collected/turned over against VR
the amount of cash and checks
deposited to determine
accommodated checks.

3.16 Match official receipts issued for C

checks collections against the list of
checks to determine all cash
collections are remitted.
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BY DATE DATE
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3.17 Check footings of the RCD and C

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).

3.18 Verify remittances from the C

Cashier’s/ Treasurer's RCD.

4.1 Check the propriety of the presentation VM

of the account. See that it conforms to PD
the provisions of the New
Government Accounting System.

4.2 Check whether adequate disclosure PD

concerning the accounting method of
recording income has been made in
the financial statements.

4.3 Note and document exceptions, if any.

Prepare and issue AOM.

PREPARED BY : REVIEWED BY : APPROVED BY :

Date Date Date