ASSURANCE IN FINANCIAL AUDITING Table of contents_part11 pptx

A Handbook 241 Appendix 5D INDIVIDUAL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL Name of Reviewer Signature Date Financial year QAQ reference Reviewing object name Name of audit manager/ Director Signature Date Conducting Financial audit phase (circle please) Planning/ Conducting/ Reporting WP No WP ref No Observation: Insert the observation here Cause Effects: Write down impact of observation Feedback from the Audit manager/ Audit director Insert the feedback here Recommendation Insert recommendation INDIVIDUAL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL Write the reason of observation including the sub element reference This is trial version www.adultpdf.com A Handbook 242 FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL Name of Reviewer Himanshu Signature Date 31.10.2008 Financial year 2007 QAQ reference C1 Reviewing object name Agency of secondary education Name of audit manager/ Director Gautam Signature Date 01.11.2008 Conducting Financial audit phase (circle please) Planning/ Conducting/ Reporting WP No RW08-1 WP ref No R – 3 Observation: INTOSAI Standards paragraph 3.1.3 (k), International Auditing standards 300 paragraph 2, 8 & 9 and International Standards of Supreme Audit Institution 1300 require working papers to include a planning memorandum. Although the SAI methodology requires the preparation of planning memorandum, there was no planning memorandum on file. There was no indication that a plan was prepared before the execution of the audit. Cause Effects: Objectives of the audits may not be achieved due to lack of planning and this may result in wastage of resources. Feedback from the Audit manager/ Audit director The observation is noted and we make all the necessary effort to prepare audit plans and place them on file. Recommendation The SAI should develop an operational plan that considers all resource requirements and allocates sufficient resources to enable audit teams to conduct their audits efficiently and effectively. Adherence to the operational needs should be monitored by the supervisors. During the period under review the SAI was under pressure to meet the statutory deadline and teams were going out for audits without preparing audit plans and there was no proper supervision. Last year the report was produced six weeks after the deadline. This is trial version www.adultpdf.com A Handbook 243 Appendix 5E QUALITY ASSURANCE REVIEW RECORDING FORM (QARRF) 1. TERMS OF REFERENCE A. Positive observation Summary of the Key Positive Aspects from the Review B. Areas for improvement QAQ reference Observation Causal Factors Sub- element Effects Recommendations Audit manager/ Audit director Comments 2. PLANNING A. Positive observation Summary of the Key Positive Aspects from the Review B. Areas for improvement QAQ reference Observation Causal Factors Sub- element Effects Recommendations Audit manager/ Audit director Comments This is trial version www.adultpdf.com A Handbook 244 3. EXECUTION PHASE A. Positive observation Summary of the Key Positive Aspects from the Review B. Areas for improvement QAQ reference Observation Causal Factors Sub- element Effects Recommendations Audit manager/ Audit director Comments 4. REPORTING PHASE A. Positive observation Summary of the Key Positive Aspects from the Review B. Areas for improvement QAQ reference Observation Causal Factors Sub- element Effects Recommendations Audit manager/ Audit director Comments Signed by …………………… Date ……………. This is trial version www.adultpdf.com A Handbook 245 Appendix 5F SAMPLE: QUALITY ASSURANCE REVIEW RECORDING FORM Appendix 5F SAMPLE: QUALITY ASSURANCE REVIEW RECORDING FORM 1. TERMS OF REFERENCE A. Positive observation Copy of audit engagement letter was attached in audit file and it confirmed the auditor’s acceptance of the appointment, the objective and scope of the audit, the extent of the auditor’s responsibilities to the client and the form of reports. B. Areas for improvement QAQ reference Observation Causal Factors Sub-element Effects Recommendations Audit manager/ Audit director Comments A1 There are no documents demonstrating compliance with Code of Ethics and assessment of the audit team competency. Office does not have specific policy to assess the competency of staff before assigning the audit engagement and system of evaluating the compliance of Code of Ethics. No any guidance was given in this regard. Internal Governance The audit management did not know whether they had assigned competent team to the audit. The SAI needs to establish the policy of objective assessment of the competency of the available manpower in the Directorate before assigning audit. There should be proper documentation of competency assessment and competency. SAI should create a roster of its manpower considering the expertise based on each sector and nature of audit. The assessment and monitoring policy needs to be formulated recognizing the requirement of the Code of Conduct. The policy of objective assessment of the competency of the available manpower within the respective Directorate will be formulated This is trial version www.adultpdf.com A Handbook 246 2. PLANNING A. Positive observation Materiality logically determined and well documented according to the IAS. B. Areas for improvement QAQ reference Observation Causal Factors Sub-element Effects Recommendations Audit manager/ Audit director Comments C.1 There was no planning memorandum on file. There was no indication that a plan was prepared before the execution of the audit. During the period under review the SAI was under pressure to meet the statutory deadline and teams were going out for audits without preparing audit plans and there was no proper supervision. Last year the report was produced six weeks after the deadline. Internal governance Objectives of the audits may not be achieved due to lack of planning and this may result in wastage of resources. INTOSAI Standards paragraph 3.1.3 (k) and International Auditing standards 300 paragraph 2, 8 & 9 and International Standards of Supreme Audit Institution 1300 require working papers to include a planning memorandum. It would be good for the SAI to come with a proper operational plan that will cater for all resource requirements and enable audit teams to conduct their audits efficiently and effectively. Adherence to the operational needs should be monitored by the supervisors. The observation is noted and we make all the necessary effort to prepare audit plans and place them on file. H.5 The risk assessment did not evaluate the significance of the risks identified and the audit procedures did not clearly respond to the risks identified. There is no manual or technical guidance related to risk assessment. Audit methodology and standard (Manual and Guidance) The audit programs might lead to ineffective audit execution. SAI should prepare manual for the implementation of the risk assessment concept of guideline. Process, toolkit and checklist for risk assessment need to be defined in the manual; SAI has felt the necessity of developing manual, format and toolkit for risk and internal control assessment. Due to resources constraint SAI has yet to develop such document. D-6 Audit procedures in audit program appear to be inadequate to attain the audit The audit programs were not updated in case additional or alternative audit procedures The audit procedures may not attain the audit objectives. As audit progresses, changes due to additional audit procedures should be reflected in the audit program The audit team leader will ensure that such changes are fully demonstrated This is trial version www.adultpdf.com A Handbook 247 objective. were undertaken during and upon completion of the audit. Audit Methodology (Tools) Human Resource (Training) in the future. Signed by …………………… Date ……………. This is trial version www.adultpdf.com A Handbook 248 Appendix 5G Sample Template of draft report FINANCIAL AUDIT REVIEW REPORT TABLE OF CONTENTS INTRODUCTION ……………………………………………………………………………. 1 APPROACH AND METHODOLOGY …………………………………………………… 1 OBSERVATIONS ……………………………………………………………………………. 1 1. Terms of reference …………………………………………………………………. 1 2. Planning ……………………………………………………………………………….1 3. Execution …………………………………………………………………………… 1 4. Reporting ……………………………………………………………………… 1 5. General Overall conclusion Management response INTRODUCTION Please insert the background information APPROACH AND METHODOLOGY Please insert the main data gathering techniques Limitations, if any, of the approach OBSERVATIONS 1. Terms of reference Positive observation This is trial version www.adultpdf.com A Handbook 249 Areas for improvement Observation: Effects: Casual factors sub elements: Recommendation: 2. Planning Positive observation Areas for improvement Observation: Effects: Casual factors sub elements: Recommendation: This is trial version www.adultpdf.com A Handbook 250 3. Execution Positive observation Areas for improvement Observation: Effects: Casual factors sub elements: Recommendation: 4. Reporting Positive observation Areas for improvement Observation: Effects: Casual factors sub elements: This is trial version www.adultpdf.com . 241 Appendix 5D INDIVIDUAL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL FINDING RECORDING FORM AT THE FINANCIAL AUDIT LEVEL Name of Reviewer Signature Date Financial year QAQ. Reviewing object name Name of audit manager/ Director Signature Date Conducting Financial audit phase (circle please) Planning/ Conducting/ Reporting WP No WP ref No Observation: Insert. impact of observation Feedback from the Audit manager/ Audit director Insert the feedback here Recommendation Insert recommendation INDIVIDUAL FINDING RECORDING FORM AT THE FINANCIAL