WORKING PAPERS

Christian James Saquilabon

Devie Mae Sarsale

Kathy Silawan

Rosemarie Tabasa

Joyce Ann Tecson

Jasmin Tubo Jasmin Tubo

Prepared by Reviewed by

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 WORKING PAPER SUMMARY (TABLE OF CONTENTS)

NAME - TITLE OBJECTIVE PAGE NO. AUDITOR

FINDINGS 1 To review the data information 3 Christian James Saquilabon

regarding the customer type and
whether there is a cash customer.
To compare the amount per audit
FINDINGS 2 and the amount issue if there is any 4 Christian James Saquilabon
difference.

FINDINGS 3 Compare the age of the receivable 5 Devie Mae Sarsale

with the credit term to determine
the specific overdue invoices.

FINDINGS 4 To check that the customer's 6 Devie Mae Sarsale

account does not exceed the credit
limit and that the company is
enforcing controls to reduce the
possibility of customer
nonpayment.

FINDINGS 5 To see the total balances (eg. SL, 7 Kathy Silawan

GL, and Variance)

FINDINGS 6 To see if the name and the name 8 Kathy Silawan

audit are the same.

FINDINGS 7 To check if all the values (e.g. 9 Rosemarie Tabasa

hours and rate are within the limit
allowed per policy.

FINDINGS 8 To check if all the values (e.g. 10 Rosemarie Tabasa

hours and rate are within the limit
allowed per policy.

FINDINGS 9 To check if all values are within 11 Joyce Ann Tecson

the limit allowed per policy.

To check if overtime was only

FINDINGS 10 allowed to minimum wage earner 12 Joyce Ann Tecson
per company policy.

FINDINGS 11 To specify a logical false value and 13 Jasmin Tubo

returns it accordingly.

FINDINGS 12 To specify a logical false value and 14 Jasmin Tubo

returns it accordingly.

FINDINGS 13 To specify a logical false value and 15 Jasmin Tubo

returns it accordingly.

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 FINDINGS DEVELOPMENT SHEET

Title Sales Audit: Validity Test

Objective To review the data information regarding the customer type and whether
there is a cash customer.
Finding No. 1 Date: July 19, 2022

Findings:

Effect:

The Account Receivable and the Income will reduce.

Possible Cause:

Due to the findings that there is a cash customer type included under the account name of Weesly
So in which he is not allowed to have credit transactions.

Recommendation:

As the auditor, I recommend management to review the information thoroughly.

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 FINDINGS DEVELOPMENT SHEET

Title Sales Audit: Re-computation

Objective To compare the amount per audit and the amount issue if there is any
difference.
Finding No. 2 Date: July 19, 2022

Findings:

Effect:

Sales are overstated at 2,875 pesos.

Possible Cause:

The accountant mistakenly types 22,500 instead of 2,500 and some of the findings recorded is
due to the lack of the management to review the data thoroughly.

Recommendation:

As the auditor, I recommend the accountant to check thoroughly the information given and the
management to review all the data information.

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 FINDINGS DEVELOPMENT SHEET

Title Overdue AR Audit

Objective Compare the age of the receivable with the credit term to determine the
specific overdue invoices.
Finding No. 3 Date: July 19, 2022

Findings:

Effect:

Findings 3 shows the customer accounts with past-due balances. The customer did not pay their
accounts on time, which could increase the opportunity cost and affect the company's cash flows.
The cash that could have been collected from these accounts could have been used for other
investments or to pay off other companies' obligations. However, because these amounts have not
yet been collected, the cash will not circulate to the benefit of the company.

Possible Cause:

If customers do not pay on time, there will be an overdue account balance. The customer may not
be motivated to pay their obligation in advance because the company's strategy is lacking or
there's no strategy implemented. Management did not plan well and did not secure enough
emphasis on developing and implementing effective strategies.

Recommendation:

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 The company could develop strategies to encourage early payments, such as offering cash
discounts or providing benefits to customers who pay their accounts on time.

FINDINGS DEVELOPMENT SHEET

Title Credit Limit Test AR

Objective To check that the customer's account does not exceed the credit limit and
that the company is enforcing controls to reduce the possibility of customer
nonpayment.
Finding No. 4 Date: July 19, 2022

Findings:

Effect:

Findings 4 shows the accounts for which the company has set a credit limit. As a result, default
risk may increase, as there is a greater chance that these customers will be unable to pay their
accounts in full. This may result in a loss for the company. Because the large outflows and lack of
inflows may result in the company's bankruptcy in severe cases.

Possible Cause:

In this case, the customer purchases items on account that exceed their credit limit. It's possible
that the staff failed correctly evaluate it or were unaware of the company's policy regarding the
customer's credit limit. It's also possible that management failed to communicate effectively with
their employees.

Recommendation:

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 The management must communicate effectively with their employees so that employees are
knowledgeable about the company's policies and the limits set by the company owner to its
customers.

FINDINGS DEVELOPMENT SHEET

Title Total Balance of Variance

Objective To see the total balances (eg. SL, GL, and Variance)
Finding No. 5 Date: July 19, 2022

Findings:

Effect:

To summarize the total variance.

Possible Cause:

It can affect the previous balance of the variance, GL, and SL.

Recommendation:

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 Always recompute and recheck the data to get the correct amount or balance.

FINDINGS DEVELOPMENT SHEET

Title Name Comparison

Objective To see if the name and the name audit are the same.
Finding No. 6 Date: July 19, 2022

Findings:

Effect:

It can affect the salary of the employee because of the wrong input of names.

Possible Cause:

Because they have a lot of employees so it is possible that the management will mistakenly input
the names of their employees.

Recommendation:
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 Always recheck the names and data you put in the records.

FINDINGS DEVELOPMENT SHEET

Title Hours Limit Test

Objective To check if all the values (e.g. hours and rate are within the limit allowed
per policy.
Finding No. 7 Date: July 19, 2022

Findings:

Effect:

There could be possible misstatements in the Financial Statement of the company. An error in the
working hours could affect the total income of the employee which would also reflect in the
Employer’s expenses that could affect the cash flow of the company.

Possible Cause:

The payroll personnel must have recorded the regular working hours of the employee more than
what is allowed by the policy. It could also be possible that the overtime hours of these
employees were added to their regular working hours and were not put as their overtime hours.

Recommendation:

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 Rechecking and reclassifying the regular working hours and overtime working hours should be
done. Also having an authorized person to validate the regular and overtime of the employees
could also work to maintain and make sure that everything is in order.

FINDINGS DEVELOPMENT SHEET

Title OT Hours Limit Test

Objective To check if all the values (e.g. hours and rate are within the limit allowed
per policy.
Finding No. 8 Date: July 19, 2022

Findings:

Effect:

Having too much overtime from employees that exceeds their limit could affect the financial
statement of the company. Also, employees who do not follow the policy that says 12 hours are
the only allowed time for them to work overtime could be followed by their other colleagues,
hence, leading them to delay their work to have additional overtime pay.

Possible Cause:

Employees must have forgotten the sense of time whenever they are working overtime. Also, it
could be possible that the payroll personnel must have misstated their overtime hours.

Recommendation:

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 To have a segregation of duty in which someone is responsible to check if the employees are still
following the quota that only allows them to have an overtime in total of 12 hours.

FINDINGS DEVELOPMENT SHEET

Title Rate Limit Test

Objective To check if all values are within the limit allowed per policy.
Finding No. 9 Date: July 19, 2022

Findings:

Effect:

The financial statements were misstated wherein the company’s balance sheet is overstated and
the income statement is understated.

Possible Cause:

The payroll personnel have recorded the employee’s rate as lesser than the company’s minimum
wage rate per hour.

Recommendation:

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 The company must recalculate the employee’s payroll account that conforms to the company’s
minimum wage rate per hour policy.

FINDINGS DEVELOPMENT SHEET

Title Overtime Validity Test

Objective To check if overtime was only allowed to minimum wage earner per
company policy.
Finding No. 10 Date: July 19, 2022

Findings:

Effect:

The company is not in compliance with its own policy. By not enforcing the minimum wage
earner per company policy, it is likely to expose that the overtime transactions are not properly
administered.

Possible Cause

Overtime was allowed to those who are not minimum wage earners.

Recommendation:

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 The payroll personnel must increase their attention on the company’s policy to ensure that
overtime was only allowed to minimum wage earners.

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 FINDINGS DEVELOPMENT SHEET

Title Deductions - SSS Comparison

Objective To specify a logical false value and returns it accordingly.
Finding No. 11 Date: July 19, 2022

Findings:

Effect:

The financial statement was misstated in the sense that the mandatory deduction such as
SSS is understated.

Possible Cause:

The payroll personnel have recorded the employee’s SSS rate as lesser than the company’s
minimum deductions.

Recommendation:

Rechecking and reclassifying the mandatory deduction such as SSS should be done. Also
having an authorized person to validate the minimum payment of SSS, employees could
also monitor and make sure that everything is in order.

FINDINGS DEVELOPMENT SHEET

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 Title Deductions - PhilHealth Comparison
Objective Used to specify a logical false value and returns it accordingly.
Finding No. 12 Date: July 19, 2022

Findings:

Effect:

The financial statement was misstated in the sense that the mandatory deduction such as
PhilHealth is understated.

Possible Cause:

The payroll personnel has recorded the employee’s PhilHealth rate as lesser than the
company’s minimum deductions.

Recommendation:

Rechecking and reclassifying the mandatory deduction such as SSS should be done. Also
having an authorized person to validate the minimum payment of SSS, employees could
also monitor and make sure that everything is in order.

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 FINDINGS DEVELOPMENT SHEET

Title Deductions -Take Home Pay per Audit Comparison

Objective Used to specify a logical false value and returns it accordingly.
Finding No. 13 Date: July 19, 2022

Findings:

Effect:

The effect of this data is the take-home pay will be overstated which is a net amount of
income received after the deduction of taxes and benefits.

Possible Cause

The payroll personnel has recorded or deducted certain accounts that should not be
included in computing the net amount.

Recommendation:

Rechecking and reclassifying the mandatory deduction before computing the net amount.
Also having an authorized person to validate the taxes and benefits being deducted, regular
monitoring and ensuring that everything is in order.

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