12.

Product/Project Accounting
-This area of the accounting department is accountable for monitoring the progress of
projects, investigating variances, and ensuring that project billings are issued to
customers and payments collected. In some respects, the project accountant position is
a derivation of the cost accountant position, since the bulk of the project activities relate
to the examination and prediction of costs. However, the project accountant has a wider
range of responsibilities, including billings, record management, reporting, and
audit support.
Project control is another essential accounting procedure. Any deviations from the
project plan affect the project’s bottom line. Project control can achieve significant cost
savings during the planning and design phase, as well as in the advanced stages of the
project. Therefore, it is the project manager’s main role to help achieve the best setup
and development of the project plan. It’s the project accountant’s role to ensure the
project financials such as billing and revenue are set up correctly to match the contract
terms for the project.
 Control Objectives:
a. To ensure that the appropriate costing method is selected.
* As an auditor, you can inquire sa management kung ano yung costing method
na ginagamit nila and titingnan mo kung nagtutugma bai to sa ginagawang
costing method ng project department
b. To ensure that all the relevant costs are identified and accurately recorded.

* You can have the listing of prices and very kung match ba ito sa mga nakarecord sa
libro.
c. To ensure that all projects and product developments/launches are suitably
authorized as part of the strategic direction of the organization.
*
d. To ensure “local” factors are appropriately taken into consideration, such as market
share, price sensitivity, price controls, etc.
e. To establish budgets based on reliable data and assumptions.
f. To ensure that actual costs and progress are adequately monitored and that
variances are identified and acted upon.
g. To ensure that actual sales or project outturn performance is monitored and
managed.
h. To ensure that the accounting system accurately reflects all the relevant economic
events associated with each product/project.
13. Petty Cash and Expenses

This section is responsible to provide business units with sufficient cash to cover minor
expenditures. So instead na mag issue pa ng checks yung mga company for this small
amount of expenses (which is unacceptable), for convenience ( to avoid the waiting and
mga possible bank charges, nag allot sila fund for this small amount of expenses.
Although this petty cash fund is inherently prone to fraud and abuse, during an internal
audit minor lang yung attention na binibigay ditto due to its low materiality.
 Control Objectives:
a. To ensure that all expenses are valid and authorized. ( petty cash department)
* So usually the management assigned few employees in this section. Just like the
petty cashier, they can be assigned na magissue ng check para pondohan yung
petty cash drawer and to record the appropriate entries everytime na may movement
in the petty cash account. Yung petty cash custodian naman is more on the
distribution of cash and collecting receipts para sa laaht ng purchases.
* Dapat habang bumababa yung petty cash total, tumataas din yung total receipts
and it should reconcile to the total amount withdrawn.
AS AN AUDITOR HOW CAN WE ADD VALUE IN THIS CASE?

*As an auditor, you will only oversee if this internal control is being performed ( Ensure
segregation of duties. Custodians should not self-approve replenishments or other changes to
the petty cash account) , to verify you can conduct unannounced petty cash funds
reconciliations to ensure fund balances are accounted for accurately or surprise
count. The Cash on hand and receipts for disbursements made should always equal
the assigned amount of the petty cash fund. In case of cash shortage or cash
overage, then it is the point in in time when you need to possess that skeptic mind to
assess what causes such misstatements to occur safe to assumed ( nagkaroon ba
ng misappropriation of funds and so on)

b. To ensure that all expenses are correctly identified, recorded and accurately
reflected in the accounting system. ( this control objectives helps para malessen
yung mga possible errors).

*Analyzed petty cash account records and receipts, reimbursement vouchers,

cashiers designations and randomly sampled transactions to evaluate
compliance with petty cash fund procedure.
* Compared petty cash amounts to records maintained by the department with
the amounts recorded on the Companies financial accounting system to verify
the accuracy and consistency of petty cash fund balances.
c. To ensure that all expense payments are in accord with company policy and any
relevant external regulations.
 *Meron lang kasing limit na amount na minemaintain for the petty cash fund
(depending on the company policy) and it should not exceed the amount set and that
petty cash funds should not be expended for
i. Salaries, wages, or similar payments to individuals.
ii. Purchases of goods and services for the personal use of faculty or staff
members.
iii. Payroll advances, travel advances, and loans to employees or students
iv. Cashing checks for employees or other individuals.
v. Reimbursement of entertainment expenditures.

*As an auditor, pwede mong ireview yung actual fund useafe and computed the
time required to obtain reimbursement from the controllers office to determine if
funds were maintained at an acceptable level.

14. Financial Information and Reporting

 The key concerns relate to accuracy, completeness, timeliness and security of the
information.
 Control Objectives:
a. To ensure that management (and others within the organization) are provided with
accurate and timely financial information to support their decision making and activities.
b. To ensure that all the relevant financial reports and returns are accurately prepared
and distributed to external bodies in accordance with the prevailing legislation,
regulation and contractual obligations.
c. To ensure that accounting records and statements are correctly maintained and
prepared in accordance with the prevailing accounting standards and good practice.
d. To ensure that all financial information is adequately protected from loss, misuse or
unauthorized leakage.
e. To ensure that sensitive or confidential corporate financial information is adequately
protected.

15. Investments
 Control Objectives:
a. To ensure that all investment decisions are adequately researched and authorized in
accordance
with the established objectives.
b. To ensure that investment commitments do not interfere with the required cash flow
and that
sufficient working funds are maintained