Objective

To obtain reasonable satisfaction that the allowance for credit losses is not materially misstated

customers

Over the past 2 years, management has written off a number of debtors. However, the trading terms for the Association in
review of the debtors aging, we noted that the majority of these customers have exceeded their credit terms. Inquiries w
usually writes off debtors after losing legal cases or most recently now due to the inflationery environment legal fees
determining the loss rate, we thus obtained the debtors age analysis and compared that with the amounts written off in a
adjusted for the following forward looking information:

Management invoice there levies in ZWL and cuatomers pay either in USD or in local currency at the prevailing interbank
b. The RBZ has suspended the publishing of the year to date inflation rates. However, from the
(https://tradingeconomics.com/zimbabwe/inflation-cpi) We noted that the inflation rate was placed at 60.7%.
After determining the loss rate, we calculated the expected loss rate per each category by multiplying the loss rate by th
of Defualt were thus determined.

Year Total Balance Current 30 days

2017 967,530.00 111,019 (1,777)
2018 346,676.11 16,743 12,602
2019 526,955.11 203,127 61,430
2020 3,554,843.00 1,720,751 783,912
2021 4,378,502.89 a 2,401,815.36 707,620.87

Loss rate
2017 16% CC
2018 17% CC
2019 10% CC
2020 0% CC
2021 11% CC

Age amount divided by actual write off Current 30 days

2017 17,539.65 -280.74
2018 2,799.65 2,107.19
2019 20,164.07 6,098.09
2020 2,721.38 1,239.76

Age amount divided by actual write off as a percentage of loss rate Current 30 days
2017 2% 0%
2018 1% 1%
2019 4% 1%
2020 0% 0%

Average 2% 0%
Adjust for forward looking items
Inflation 10 % 10 %
Management involvement - -
Credit risk 2% 0%
Total 12 % 10 %

Probability of default in 2020 adjusted for futuristic vie b 0.13 0.11

Allowance for credit loss a*b 318,522 77,028

Recalculated provision for bad debts (621,938)

Bad debts
peter (136,677)
stan (1,850) AA
ashy (53,780) 35.01M1e
pretty - 154,305.17 35.01M1e
rue (282,005) AA
newewo (499,331) AA

Total provision for bad debts (1,749,887) CC

Balance as per client ledger (472,913) linked

Movement during the year (1,276,973.62) CC

Proposed Adjustment journal DR CR

Aud 009 Increase in provision for bad debts 1,276,974

7025/201 HO - Prov for Doubtful Debts (1,276,974)
Being the recognition of increase in provision for bade debts during the year

Notes
N1
The client wrote off the total of $189,304 ( $141,027 and $48,277) for I. Chiwara.
Therefore , we are providing a provision for the balance of $ 240,305.80 less
$189,304 which is $136,677
The client has a balance of $53,780 from $78,975 which was the
N2 debt as at 31st December 2021

Key
AA Agreed to Age Analysis as provided by management
N Notes

Conclusion
Based on work done, there is reasonable satisfaction that the allowance for credit losses is not materially misstated after t
g terms for the Association indicated that the credit terms are 30days. From the
heir credit terms. Inquiries with management however indicates that the entity
ery environment legal fees might be higher than the debt being pursued. In
the amounts written off in a particular year. The determined loss rate was then

y at the prevailing interbank rate.

ates. However, from the review of the trade economics webtsite
placed at 60.7%.
ultiplying the loss rate by the weighting per category. The following Probability

60 days 90 days 120 days Ref Bad debts write offs

8,376 7,010 842,902 AA 152,858
13,095 22,272 281,964 AA 57,968
73,824 45,014 143,561 AA 52,310
1,078,147 1,486 (29,453) AA 5,622
368,337.36 285,360.00 615,369.30 linked 472,913 linked

60 days 90 days 120 days Total

1,323.31 1,107.49 133,168.29 152,858 CC
2,189.57 3,724.12 47,147.46 57,968 CC
7,328.35 4,468.46 14,251.04 52,310 CC
1,705.09 2.35 -46.58 5,622 CC

60 days 90 days 120 days Total

0% 0% 14 % 16 % CC
1% 1% 14 % 17 % CC
1% 1% 3% 10 % CC
0% 0% 0% 0% CC

1% 1% 8% 11 % CC
 10 % 10 % 10 % 50 %
- - - 0%
1% 1% 8% 13 %
11 % 11 % 18 % 61 %
0%
0.11 0.11 0.25

40,898 31,442 154,048 621,938 Computed

N1

N2

t materially misstated after taking into account the proposed journal.

 Objective
To ensure that leave pay expense is not materially misstated with regards to the assertions of completeness, accuracy.

Method
1 Obtain a leave pay provision listing and agree to the ledger.
2 Reconcile the leave pay provision from Belina to that in the general ledger.
3 Perform the leave provision movement for the year ending 31 December 2021
4 Reference to where the accuracy of the provision has been tested.
5 Evaluate and conclude.

Income statement movement

Opening balance provision in payable 228,094.00 PYAFS

-
Leave expenses 4,261,620.00 Agreed to Leave Pay Provision as per Belin
Closing balance at Year end 4,489,714.00 computed

Balance per ledger balance as at year end 4,489,714.00 linked

Difference - accepted as immaterial

Sample size determination

Balance per ledger 4,489,714 Linked

Performance materiality 1,211,454.00 10.10

number of selections 4 Computed

Number of
Employee code Surname Initials Basic salary working days REF
1 MAIN0032 E 24,838.44 22 EC
2 MAIN0017 N 75,685.72 22 EC
3 ADMIN20 D 249,952.78 22 EC
4 SEC00204 I 23,547.92 22

Audit Conclusion
Based on work done pprovision for leave pay is not materially misstated with regards to the assertions of valuation.
mpleteness, accuracy.

Pay Provision as per Belina

Bal
b/f(November
Daily rate REF ) REF Days accrued REF bal c/f Leave value
1,129 computed 13 LV 2.5 LV 15.5 17,499.81
3,440 computed 20 LV 2.5 LV 22.5 77,405.85
11,361 computed 22.5 LV 2.5 LV 25 284,037.25
1,070 computed 33.5 LV 2.5 LV 36 38,532.96

rtions of valuation.
 Value on
REF report REF Difference
computed 17,499.81 LV - computed
computed 77,405.85 LV - Immaterial
computed 284,037.25 LV - computed
computed 38,532.96 LV - computed