Perspective of State

Auditing
presented by: Group 3

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 hello!

Manlutac, Czar Soliven, Bradley

Lawenko, Ancie L. Liberato, Crystelle Anne Lluz, Loribelle Malto, Melanie B.
Richard Lawrence E. J.
Region V L. MIMAROPA Region P. Management Bureau
Land Land Management Bureau Region I
Region III

Soriano, Ma. Vivian O. Tang, Xylene A. Tenepre, Reydelyn A. Tolentino, Cesar D. Redoña, EvaryJil M.
MIMAROPA Region MIMAROPA Region Region IX EMB-NCR PhilHealth

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What is Auditing?
Loribelle P. Lluz

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Accounting vs. auditing
Melanie B. Malto

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Auditing basic policies and
standards
Czar Richard Lawrence E. Manlutac

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Phases of audit
Cesar D. Tolentino

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 01
FOUR PHASES IN ANY AUDIT FUNCTION

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03 04
01
Preliminary
survey
Review and testing of
management control

Detailed Report
examination development

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 Preliminary Survey 

Preliminary survey involves obtaining background and general information on all

aspects of the organization, activity, program, or system being considered for
examination to gain working knowledge of the organization.  It includes historical
and operating information for the activities of the organization and legislative
information on its activities.  

The preliminary survey enables the auditor to make a preliminary determination as

to the audit objective which is tentative.  It also becomes the basis for determining
how to obtain the evidence and how much evidence is needed for the review and
testing of management controls.

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 Review and Testing of Management Control

The purpose of this phase in the audit function is two-fold:

to obtain evidence on the elements of the tentative audit objective by actual testing
of a.
management control transactions of the organization

to determine that the evidence obtained from within the organization would be
competent
b. if the audit were extended into a more detailed examination. Simply, to
firm up the audit objective. 

Management control embraces the entire system of the organization including planning,
policy, and procedures determination and actual practices carried out in managing an
organization’s affairs.

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 Detailed Examination AND Report Development

Detailed Examination
 This phase is the audit itself. However, the two prior phases are just as
important as the detailed examination. They determine what is to be done in
the detailed examination and how it is accomplished.

Report Development
 All work done in the audit function is converted into a report that an
interested third party can accept and understand.

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 Planning and Programming the Audit
Audit planning and programming are concerned with how the audit is organized.

Audit Plan

Audit planning involves three chief concerns that pertain to the overall audit work:

a) Staff and time estimates. This includes the types of personnel needed as well as the
man-days estimated to do the audit.

b) Other audit planning considerations. Planning for the preliminary phases is as

important as audit programming for the detailed examination.

c) Report planning. The consideration on what to be reported on as soon as the audit

objective is firmed up.

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 Planning and Programming the Audit

Audit planning and programming are concerned with how the audit is organized.

Audit Program
The audit program for each phase spells out specifically the following:
1) the description or outline of the objectives of each phase
2) the procedures to be undertaken or particular work to be done in prosecuting
the audit
3) the time allotted and personnel assignments

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 Contents of the Audit Program

The audit program contains the following:

a. Various auditing steps to be performed such as:

 review of the system of internal control
 audit of balance sheet accounts
 audit of income statement accounts
 preparation of audit reports
 preparation of comments on the operation of the system of internal control

b. Contemplated audit time required to perform each of the audit steps

c. Actual amount of time involved in carrying out the program.
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 Audit Procedures and Determination of Audit Procedures

Audit Procedures
The audit procedures, as part of the audit program, consist of the specific directions for carrying out the
detailed examination phases such as collecting, analyzing, interpreting, and documenting information
during an audit.

Determination of Audit Procedures

In the determination of auditing procedures and techniques to be followed and the extent of
examination of vouchers and other documents by government auditors, generally accepted principles of
auditing and accounting organizations and systems including consideration of the effectiveness of
internal control and related administrative practices of the audited agencies are given due regard.

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 Determination of Audit Procedures
Determination of Audit Procedures
These procedures are:
1. Test control system
2. Review of operational activities
3. Inspection and count
4. Accuracy proof
5. Preparation of reconciliations

Procedures vary between audit engagements. If procedures are improper, the audit will fall below
recognized standards of performance. Audit procedures should be tailored to fit each circumstance
and must be streamlined to avoid wasted motion and unnecessary audit operations.

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 Audit Techniques

Audit techniques are the methods by the auditor in collecting or securing evidence
or information. Some of these are:

 Physical examination and count  Inquiry

 Confirmation  Comparison and correlation
 Vouching of authoritative documents with related information
 Recomputation  Reconciliation
 Retracing bookkeeping procedures  Analysis
 Scanning and observation of  Interview
pertinent activities and conditions

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 WORKING PAPERS

Working papers are the records of the information obtained and the evidence gathered during the
examination on the audit objective. The working papers provide:

1. a record of information and evidence on the objective of 3. the basis for:

each phase of the examination;
2. a record of evidence on the competency of the evidence
gathered on the audit objective;
4. a tool for the audit supervisor to manage the assignment;
5. a tool for the auditor to use in making the audit;
6. a record for future use;
7. a source of teaching material for new auditors; and
8. a protection against questioning the integrity of the
auditor.
a. Audit program for the review and testing of
management control from the preliminary survey
working papers
b. Audit program for the detailed examination from
the review and testing of management control working
papers
c. Final report from the detailed examination working
papers

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 AUDIT
REPORT
Audit Report
The audit report contains the results of the audit. It consists of the following paragraphs:
a. Scope
b. Management’s responsibility
c. Auditor’s responsibility
d. Auditor’s opinion

The effectiveness of the functions of the auditor ultimately depends on the publication of
findings rather than any particular policing powers.

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 Types of Auditor’s Opinion

The types of opinion that the auditor may express are the following:
1. Unqualified opinion. The “clean” opinion. It is the best type of report an auditee may receive from an
external auditor.
2. Qualified opinion. This is issued when the auditor disagrees with or is uncertain about one or more types
of situations which do not comply with generally accepted accounting principles but the rest of the financial
statements are fairly presented.
3. Adverse Opinion. This is issued when the auditor determines that the financial statements of an auditee
are materially misstated and when considered as a whole, do not conform with GAAP. It is the opposite of an
unqualified or clean opinion.
4. Disclaimer of Opinion. This is issued when the auditor could not form and consequently refuses to
present an opinion on the financial statements.

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 “ on audit
Commission
(clusters and offices and functions)
Ancie L. Lawenko

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Irregular,unnecessary,excessive,extrav
agant and unconscionable
expenditures
(Iueeu-COA Circular)
Bradley J. Soliven

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 Laws and rules on
government expenditures
Ma. Vivian O. Soriano

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Republic“Act 9184
Government procurement reform act
Crystelle Anne L. Liberato
Xyelene A. Tang

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What is RA 9184?

● The Government Procurement Reform

Act (GPRA)

● An Act providing for the

Modernization, Standardization and
Regulation of the Procurement
Activities of the Government and for
other Purposes

● Now the current Philippines’

comprehensive Procurement Law

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HIstorical Background
Prior to RA 9184 :
• There were various laws governing
procurement

Nature of Procurement

EO 262 Goods/ Services

PD 1594 Infrastructure

EO 164 Consulting Services

RA 7160 By Local Govt. Units

•The bidding process was more lengthy

•There was substantial waste/loss due to

rampant corruption in the procurement
process
Enactment of gpra
PROCUREMENT REFORMS

PROBLEMS REFORMS

Confusion caused by Enactment of the

fragmented legal Government
system Procurement Reform
Act (GPRA)

Inconsistent policies, Creation of the

rules, and regulations Government
due to lack of Procurement Policy
standards Board (GPPB)

Lack of transparency Use of PhilGEPS

(Philippine Government
Electronic
Procurement System)

Lack of check and Participation of civil

balance society
Coverage of RA 9184 Impact/s:

● RA 9184 applies to or covers both According to GPPB:

1. Domestically-funded procurement
1. Bidding time has been cut into half
and
2. There is more transparency
2.Foreign-funded procurement
3. Decrease in price (50% decrease for
unless otherwise specified in treaty
textbooks; 27% decrease for
stipulations or international or pharmaceuticals, etc);
executive agreement.
4. Easier to get information on biddings
● conducted
Scope of RA 9184 covers/governs
Procurement Planning up to Contract
Implementation of all agencies and
instrumentalities of government
Governing principles of government procurement under ra 9184
(sec 3)

Public
Monitoring
Accountability

Competitivene
ss
Transparency

Streamlining and Use of

Modern Technology in
Procurement
Financial Audit manual
Reydelyn A. Tenepre
EvaryJil M. Redoña

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 Thanks!

any
Questions ?
✋😉

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