Client: ABC Corporation

Engagement: Financial Statement Audit

Subject: Audit Program - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Agree Procedures
Working Paper Reference K.1000

Initials of preparer
Results of the procedures performed and reference to
Procedures Relevant assertions and date
specific audit evidence.
1. Lead schedule C A CO E/O RO V PD
Obtain or prepare a lead schedule setting out the movement in
the period for each category of investment property and perform
the following procedures:

a. Test of mathematical accuracy of the lead schedule.

b. Agree lead schedule and to the general ledger and prior year
working paper.
c. For accounts to be tested, cross refer to specific procedures
performed.

2. Accounting Policies C A CO E/O RO V PD

Confirm that the accounting policies applied to related party
balances comply with IFRS, particularly 39.

3. Test of Controls C A CO E/O RO V PD

Test the significant controls identified Forms 422, 511 and 522
and conclude on the effectiveness of their design and
effectiveness of operation throughout the period. Identify the
assertions for which they contribute significant assurance.

4. Analytical Procedures C A CO E/O RO V PD

1. Review Inventories for reasonableness and consistency with
previous years. Enquire into and obtain explanations for any
unusual movements.
2. Consider whether substantive analytical procedures will be
effective. If so:

contributed significant assurance.

5. Substantive Procedures

A. Trade Payables C A CO E/O RO V PD

1. Agree suppliers' statements to the creditors’ ledger balances.
Verify any reconciling items. b b b

2. Obtain a list of creditors’ ledger balances and agree the list

with the control account in the general ledger. b

3. Review the list for omissions of known major suppliers. b b b

4. Check the additions of the list and the control account. b b
B. Creditors' Statement Reconciliation C A CO E/O RO V PD
1. Select a sample of creditor balances and obtain
reconciliations to the suppliers’ statements. Agree the
respective balances on the reconciliation to: b b b
1.1 The supplier’s statement.
1.2 The creditors ledger.

2. Test reconciling items as follows:

2.1 For invoices appearing on creditors’ statements but not in
client’s books, check correctness of cut-off by verifying to b b b
receiving documents (GRNs)
2.2 For payments made not reflected on the creditor’s statement,
trace payment to list of outstanding cheques in the bank b b
reconciliations.

2.3 For invoices appearing in the client’s books but not in the
creditor’s statement, check to receiving documents (GRNs) to b b b
ensure that goods were received before the cut-off
2.4 For payments appearing in creditor’s statement but not in
client’s books could indicate incorrect posting. Consider
whether adjustments are required to the bank balances and b b b b
creditors.
 Initials of preparer
Results of the procedures performed and reference to
Procedures Relevant assertions and date
specific audit evidence.
C. Credit Circularisation C A CO E/O RO V PD
1. Consider circularisation where: b b b
1.1 Suppliers’ statements are unavailable;
1.2 Weaknesses in control systems exist;
1.3 There are aunusual
1.4 small number of (such
creditors majoras
suppliers;
material unusual loans);
or
1.5 Previous problems have been encountered.

2. Include in the circularisation:

2.1 Suppliers with large balances at the year-end;
2.2 Suppliers with large balances at other times;
2.3 Unusual balances; and
2.4 A sample of other suppliers.

3. Seek the client's permission if positive confirmation has not

been used before (if the client refuses consider whether there is b b b
a limitation in scope).

4. Supervise the making up of the contents (the letter and pre-

addressed postage paid envelope for reply). The envelope
should state the client’s reference number. The letter should be b b b
mailed under our control.

5. Review the replies and categorise: b b b

5.1 Balance agreed;
5.2 Balance disagreed;
5.3 Confirmation refused; and
5.4 No reply.

6. If the balance is not agreed: b b b

6.1 Ascertain and verify explanations; and
6.2 Acknowledge the creditor's reply.

7. If confirmation is refused, check whether the creditor is

willing to confirm specific items. b b b

8. If Send
8.1 there isa no reply: two or three weeks after the original
reminder b b b
request; or
8.2 Follow-up where necessary by phone.

D. Alternative Procedures C A CO E/O RO V PD

1. Examine goods received records to establish whether all
accounts have been accrued. b b b

2. Check cut-off by verifying that goods received before the year-

end have been recorded (verify Goods Received Notes to
purchase accruals). In the case of goods-in-transit, check that b
these have been subsequently received after the year-end, if not
covered under “Inventory”.

3. Review payments after the year-end to establish whether they

relate to liabilities existing at year-end. b b b

E. Foreign Currency Trade Payables C A CO E/O RO V PD

1. Review overseas shipping journals and receiving records after
the year-end. b b

2. Consider independent confirmations using steps set out

above. b b

3. Ensure that cut-off is accurate, if not covered under

“Inventory”. Generally, ownership passes as follows: b b
3.1 Free on board basis (FOB) - when the goods leave the
seller’s premises.
3.2 Cost, insurance, freight (CIF) basis - when goods reach the
purchaser.

4. The valuation of trade accounts payable denominated in

foreign currency should be verified. Ensure that the translation
of these foreign currency payables have been done at
appropriate year-end rates. The accuracy of the conversion to b
the reporting currency on initial recognition must also be
checked.

5. Ensure that foreign exchange difference has been calculated

correctly and transferred to the profit and loss account in b
accordance with IAS 21.

F. Employee Taxes C A CO E/O RO V PD

1. Check whether the accruals are correct. b b b
 Initials of preparer
Results of the procedures performed and reference to
Procedures Relevant assertions and date
specific audit evidence.

2. Verify the liability with underlying records, checking that the

creditor relates to specific deductions not yet paid. b b b

3. Verify the reconciliation of the employee tax control accounts b

and examine reconciling items to ensure correct treatment.

4. Consider the risk of penalties being levied through incorrect

interpretation of legal requirements. b b

G. VAT Payable C A CO E/O RO V PD

1. Compare VAT returns with the VAT control account and
obtain explanations for discrepancies. b b b b

2. Trace payments to / repayments from the tax authorities, from

the general ledger or cashbook to the VAT returns. b b b

3. Check the amounts shown as payable or receivable at the year- b

end have been paid or received, since the year-end.

H. Accruals C A CO E/O RO V PD
1. Confirm the accruals in the accounts with supporting
documentation. b b b

2. Ensure round sum / estimated accruals are reasonable. b

3. Ascertain why any accruals provided in previous years on a
regular basis, have not been provided for this year. b

4. Examine post year-end cash payments and invoices to see if

any further amounts should be accrued. b b b

5. Consider, using the knowledge of the client and other

information obtained during the audit, what accruals are
required at balance sheet date, and ensure the appropriate b b
liabilities are recorded.

I. Employee Leave Liabilities C A CO E/O RO V PD

Obtain schedules showing calculations of employee liabilities,
agree to the trial balance and carry out the following audit
procedures:
1. Review if provision for outstanding leave has been made in
accordance with IAS 19 b b b

2. Agree list of provision for outstanding leave and agree to the

final payroll report for the year and ensure that all employees
eligible for annual leave are included in the leave liability
calculation.

3. Compare the reasonableness of the liabilities to prior year,

quantifying this analysis.

4. Ensure that all costs have been included in the annual leave
and other leave provisions.

J. Deferred Income C A CO E/O RO V PD

1. Verify any deferred income with underlying documentation. b b

2. Consider whether any income recognised this year should be

deferred particularly in accordance with IAS 18. b b b

K. Other Creditors C A CO E/O RO V PD

Consider whether there are any liabilities that have not been
accrued, and confirm the details. b b

6. Scrutiny C A CO E/O RO V PD
Scrutinise the records of purchases and general ledger and sub-
ledgers for unusual items or balances including debit balances, b b b
round sum accounts.

7. Presentation and Disclosure C A CO E/O RO V PD

Ensure that disclosure of trade and other payables in the draft
financial statements complies with IFRS, particularly IAS 39 b
and IFRS 7.

8. Additional test C A CO E/O RO V PD

Consider whether any additional tests are required to achieve
the audit objectives.
 Initials of preparer
Results of the procedures performed and reference to
Procedures Relevant assertions and date
specific audit evidence.
Engagement Reviewer Sign-Off
Name of Reviewer:
Date of Sign-off:

Engagement Partner Sign - Off (If risk to account is considered significant risk)
Name of Engagement Partner:
Date of Sign-off:
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Lead Schedule - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Agree Procedures
Working Paper Reference: K.2000

Current year
Accounts unadjusted Prior year Movement Remarks
balance
Accounts Payable
Accrued Expenses
Others

Conclusion:

Note: Refer to Guidance for the procedure to be performed

Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Scoping - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Agree Procedures
Working Paper Reference: K.3000

Performance Materiality: 1,000,000.00

Clearly Trivial: 25,000.00

Testing
Test for
Subsequent Subsequent Test of Unearned
Account Unadjusted balance Scope-In Scope-out Rationale Confirmation unrecorded VAT Analysis
Payment Remittance Income
liabilities
Accounts Payable
Accrued Expenses
Others

Conclusion: (Please provide conclusion regarding the appropriateness of the planned procedures)

Note: Please indicate rationale for scope-in accounts and the planned Test of Control and Substantive Testing
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Substantive Analytics- Trade and Other Payables
Audit Period: Year ended December 31, 2012
Activity: Scoping of Trade and other payables
Working Paper Reference K.4000

1. Review Trade and Other Payables for reasonableness and consistency with previous years. Inquire into and obtain explanations for any unusual movements.

Current year Prior year Discussion of Significant

Account Movement
balance balance Movement
Accounts Payable -
Accrued Expenses -
Others -
Total - - -

2. Consider whether substantive analytical procedures will be effective. If so:

Step 1: Define the objective of the procedure;
Step 2: Determine the examination method;

Step 3: Define a significant deviation;

Step 4: Specify the reliance desired;
Step 5: Determine the expected result;
Step 6: Examine any deviation from the expected result;
Step 7: Evaluate the results and conclude; and
Step 8 : Identify the assertions for which analytical procedures have contributed significant assurance
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Accounting Policy-Trade and Other Payables
Audit Period: Year ended December 31, 2012
Activity: Scoping of Trade and Other Payables
Working Paper Reference K.5000

Company Accounting Policy Requirements of PFRS Remarks

Initial Recognition

Initial Measurement

Subsequent Measurement

Classification

Derecognition

Overall Conclusion:
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Confirmation Control Summary - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Scoping of Trade and other payables
Working Paper Reference K.6000

Date Balance per Sched Per confirmation Difference

Supplier's Name Sent Confirmed in PHP in USD in PHP in USD in PHP in USD Remks.

Conclusion
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Subsequent Payment/Proof of Payables - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Scoping of Trade and other payables
Working Paper Reference K.7000

Balance as of Proof of unpaid payables

31/12/2011 Subsequent Payment Amount
Supplier's Name FC PHP Date O.R # Amount - net EWT Other Ded. Sub-total Date Ref. FC PHP TOTAL Diff. Remks.

Conclusion
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Subsequent Remittance (Gov't payables) - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Scoping of Trade and other payables
Working Paper Reference K.8000

Amount Date
Particulars Period Outsanding Bal Remitted Remitted Support Remarks
Pag-ibig Fund Payable
Pag-ibig LoanPayable
Philhealth Contribution Payable
SSS & ECC Contributions Payable
SSS, Salary Loan Payable
Withholding Tax Payable-Compensation
Withholding Tax Payable-Expanded

Conclusion
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Test for unrecorded liabilities - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Scoping of Trade and other payables
Working Paper Reference K.9000

Check Voucher Date of Per supporting document Properly

Consumption/
Payee Particulars No. Date Amount Delivery Reference Date Amount Diff. Inc. Exc. Remks.

Conclusion
Client: ABC Corporation
Engagement: Financial Statement Audit
Subject: Deferred Revenue - Trade and other payables
Audit Period: Year ended December 31, 2012
Activity: Scoping of Trade and other payables
Working Paper Reference K.11000

Official Receipt Properly

Customer Particulars No. Date Amount inc. exc.

Conclusion