Sample Audit Procedures

Client name: Reference: C 1Financial year: 2008 Page: 1

AUDIT PROGRAM

Assertions

Classes of transactions and events (Συναλλαγές και γεγονότα)"O" Occurrence (Έχουν συμβεί)"C" Completeness (Όλες είναι καταχωρημένες)"A" Accuracy (Έχουν καταχωρηθεί στα ορθά ποσά)"F" Cutoff (Λογίστηκαν στην ορθή περίοδο)"L" Classification ('Έχουν καταχωρηθεί στην ορθή κατηγορία)

Account Balances (Υπόλοιπα)"E" Existence (Είναι πραγματικά)"R" Rights and Obligations (Τα δικαιούται/ έχει την υποχρέωση η επιχείρηση)"C" Completeness (Όλα είναι καταχωρημένα)"P" Valuation and Allocation (Είναι καταχωρημένα σύμφωνα με τις λογιστικές αρχές)

Statutory matters in financial statements (θέσμιες πληροφορίες στις οικονομικές καταστάσεις)"1" Officers of the entity are reflected correctly (οι αξιωματούχοι παρουσιάζονται ορθά)"2" Necessary statutory information is properly disclosed (οι θέσμιες πληροφορίες παρουσιάζονται ορθά)"3" No information disclosed is inconsistent with the auditor's knowledge of the entity (δεν υπάρχουν στοιχεία που δενσυνάδουν με τις οικονομικές καταστάσεις.")


AUDIT PROGRAM

No Procedure WP Ref or briefdescription ofproblems arising

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1 Planning phase procedures

1.1 Obtain a copy of clients systems notes for the key accounting systems(eg sales, purchases, payroll, investments) operated by the client.Alternatively hold a meeting with the client and write the systemsdown.

1.2 On the notes obtained above highlight the key controls which help toensure the assertions (ie completeness, existence, occurrence,accuracy etc.)

1.3 Select haphazardly one item at the start of a system eg sales order,purchase acquisition, timesheet and walkthrough the system notedabove to the eventual cash flow and the entry into the nominal ledger.

1.4 Discuss with client their exposure to fraudulent activity. Considerwhether their assessment is appropriate and devise a test to addressthe exposure where identified.

CONCLUSION

Based on the audit work done I am satisfied that all audit assertions applicable to this file section have been met and thatthe transactions and balances contained in therein are fairly stated, subject to:

Senior Cleared

Delete asappropriate: Initials Date

Clearance of unadjusted errors noted on .... Yes / N/A

Clearance of audit points outstanding on .... Yes / N/A

Signature Date

Completed by senior

Reviewed and approved by manager on completion of audit

Reviewed and approved by partner on completion of audit


AUDIT PROGRAM

No Procedure Assertions WP Ref or briefdescription ofproblems arising

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2 Nominal ledger/Journal entries O C A F L E R C P

2.1 Obtain evidence that non standard journalsparticularly around the year end areauthorised.

2.2 Review journal adjustments, assess forreasonableness and consider supportingevidence and authorisation

2.3 Reconcile the entity’s trial balance to thefinancial statements and file

2.4 Agree opening balances with prior yearfinancial statements or trial balance.

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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3 Subsequent events O C A F L E R C P

3.1 Review minutes of Board meetings since theperiod end.

3.2 Review management accounts for periodssince the period end

3.3 Review the solicitors’ letters

3.4 Review any changes in share capital sincethe period end and investigate dividendspaid and declared for appropriate nonadjusting event disclosure.

3.5 Confirm that the post balance sheet eventsreview has covered the entire period up tothe date of approval of the financialstatements

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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4 Going concern O C A F L E R C P

4.1 Obtain from management forecasts of cashflow, profit and loss account and balancesheets (if available) or review entity’sexpectations regarding commercial activitiesover the coming twelve months. Considerand document:-Profitability-Cash flow trends


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4.2 Consult directors of the entity and reviewinformation already obtained during theaudit. Consider and document such factorsas:-Sales orders/loss of any major customers-Likelihood of continued availability of staff,and of the goods and services used in theentity’s operations-Ability of the entity to adapt to changingcircumstances-Finance problems-Exceeding agreed financial facilities withinthe projections-Duration of agreed banking and otherfinance facilities-Progress on any renegotiation of financefacilities expiring during the projectionperiod-Requirement to repay fixed term financewithin the projection period-Major capital expenditure reduced,postponed or cancelled-Fixed assets wearing out and requiringreplacement-Age of fixed assets and likelihood of needfor replacement-Use of short term finance for long termneeds-Finance through late payment of suppliers-Extension of length of credit taken-Increasing dependence on short termfinance-Excessive run down of stocks; or necessaryincrease in stock levels-Poor liquidity-Future onerous contractual obligations-Loss of any major suppliers-Deferral of purchases or acquisitions-Significant new competitors-Technological change with implications forthe entity’s goods or services-Significant reliance on affiliatedundertakings or other related parties; use ofnon-standard terms.

4.3 Having considered the indicative factors,confirm whether or not the going concernbasis of accounting appropriate to the entity.


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4.4 If the going concern basis of accounting isnot considered to be appropriate consider:-Do the financial statements still give a trueand fair view; including the making ofappropriate disclosures by the directors?-Is an unqualified audit report appropriate?-Is any additional disclosure in orqualification of the audit report required?

4.5 In reviewing the going concern status of theentity, has a period of no less than one yearfrom the date of approval of the financialstatements been considered by thedirectors?-If not does the report of the directors makethe required disclosures?-If the necessary disclosures have not beenmade by the directors does the audit reportmake the necessary disclosure?

4.6 Consider the confirmations to be made inthe letter of representation, for example thedirectors' opinion on the continuing financialsupport given to the entity.

4.7 Obtain a letter of financial support from theparty providing the finance.

4.8 Consider whether the financial resources ofthe entity (including facilities available) arelikely to prove sufficient to enable it tocontinue to trade for at least one year fromthe date of the audit opinion.

CONCLUSION


Senior Cleared





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5 Intangible assets O C A F L E R C P

5.1 Prepare a schedule reconciling opening andclosing balances. Agreeing openingbalances to prior year financial statementsand closing balances to trial balance.

5.2 Agree cost of additions to supportingdocumentation

5.3 For sale of intangible assets agree postingsto sale agreement and consider tax position

5.4 Review accounting policy for intangiblesand assess its reasonableness.

5.5 Recalculate the amortisation charge for theperiod.

5.6 Consider whether there are any indicationsof impairment. If there is calculate theamount.

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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6 Property, plant and equipment O C A F L E R C P

6.1 Prepare a fixed asset register lead scheduleshowing the cost, accumulateddepreciation and net book value for eachasset

6.2 Perform analytical review and obtainexplanations for significant movementscompared to last year.

6.3 Obtain purchase invoices or othercorroborative evidence of acquisition for allmaterial additions

6.4 Ensure correct VAT treatment of alladditions

6.5 Check a sample of material looking fixedassets and agree they are included in thefixed asset register.

6.6 In respect of disposals or items scrappedcompute profit or loss on disposal

6.7 Ensure correct VAT treatment of alldisposals

6.8 Ensure fixed assets note and capitalallowances schedule are in agreement withfixed asset register

6.9 Obtain evidence that depreciation charge isproperly calculated in accordance withpolicy in financial statements.

6.10 Perform a proof in total of the depreciationcharge by class of material fixed assets.Obtain the cost of the property plant andequipment making broad adjustments inrespect of the timing of additions anddisposals and multiply by the annualdepreciation charge. Investigate anysignificant differences between yourexpectations and the actual chargerecorded.

6.11 Select a sample of assets and reperformthe depreciation charge calculation.Investigate any difference between thisand the actual recorded for the sample.


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6.12 Agree opening net book value to prior yearfinancial statements.

6.13 Check a sample of tangible fixed assetsfrom the fixed asset register to the physicalassets.

6.14 Check the documents of title for significantassets, or obtain confirmation from thirdparty if held as security.

6.15 Where the client revalues assets as itspolicy, obtain or prepare schedulesshowing revaluations of assets in theperiod, stating the basis of the calculationsand the qualifications of the valuers. Takenote of the date of the last valuation of allassets. Confirm that valuations in thecurrent year are reasonable in your opinionand that the time elapsed since the lastvaluation is reasonable.

6.16 Where the client revalues assets as itspolicy and there has been a revaluation inthe year, verify that the correct accountingentry has been made.

6.17 Review financial statements policy andensure client has accounted in accordancewith it.

6.18 Consider whether there are any indicationsthat tangible fixed assets may have beensubject to impairment during the period.Where there are such indications carry outan impairment review

6.19 Where assets are financed by leasingarrangements that give rightsapproximating to ownership (financeleases), the assets are treated as if theywere purchased outright. The amountcapitalised is the present value of theminimum lease payments payable duringthe lease term. The corresponding leasingcommitments are shown as obligationsunder finance leases. Depreciation on therelevant assets is charged to the incomestatement.

CONCLUSION

Based on the audit work done I am satisfied that all audit assertions applicable to this file section have been met and that


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the transactions and balances contained in therein are fairly stated, subject to:

Senior Cleared




Signature Date

Completed by senior




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7 Other financial assets O C A F L E R C P

7.1 Prepare a detailed schedule of investmentsshowing opening figures, additions,disposals and final figures. Agree openingfigures to prior year financial statements.

7.2 Perform analytical review and obtainexplanations for significant movementscompared to last year.

7.3 Where these investments are subsidiariesand associates, prepare, or obtain fromclient, schedule as at year end by name,activity and percentage held.

7.4 For acquisitions agree cost to supportingdocumentation

7.5 For disposals agree to supportingdocumentation

7.6 For a sample of investments inspect sharecertificates

7.7 Agree valuation of investments toauthoritative sources and confirm inaccordance with IAS 27, 28 or 39.

7.8 Consider whether there are any indicationsthat investments may have been subject toimpairment during the period. Where thereare such indications carry out animpairment review.

CONCLUSION


Senior Cleared




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Completed by senior




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8 Inventories O C A F L E R C P

8.1 Prepare lead schedule and obtainexplanations for significant movements.Corroborate.

8.2 Attend the year end stock take anddocument your results. Conclude onwhether the system operated effectively toproduce an accurate count.

8.3 Review final priced stock sheets and tracetest counts made during observation ofphysical stocktake to the priced stocksheets. Obtain explanations for anydiscrepancies.

8.4 For a sample of items trace quantities fromfinal priced stock sheets to rough stocksheets and obtain explanations foralterations.

8.5 Identify obsolete and slow-moving stockson hand and ensure that adequateprovision is made for potential diminishedvalue.

8.6 Assess reasonableness of management'sestimation in relation to obsolete and slowmoving stock.

8.7 Obtain a physical stock summary andagree to stock figure in financialstatements

8.8 Test check costing of a sample of rawmaterial, a sample of work in progress anda sample of finished goods stock lines byreference to invoices and other pricesources for individual items.

8.9 For a sample of stock items check thatfinal selling price is greater than bookvalue. Where this is not the casedetermine the net realisable valueadjustment required.

8.10 For a sample of despatches/ goodsreceived around the year-end perform cut-off tests

CONCLUSION


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Senior Cleared




Signature Date

Completed by senior




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9 Amount due from customers forcontract work

O C A F L E R C P

9.1 Compare gross profit margin on contractsto prior years and the expected marginsfor enterprises in a similar line of businessand explain any unusual relationships

9.2 Compare work in progress to workcertified subsequent to year-end on acontract by contract basis

9.3 Prepare or check the IR4 CON.1 form forall contracts in progress during the periodand confirm calculation of taxable income

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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10 Trade receivables O C A F L E R C P

10.1 Prepare lead schedule and obtainexplanations for significant movements.Discuss with client significant newcustomers and lost customers.

10.2 Obtain a debtors listing and reconcile tothe accounts

10.3 Check the casting of the list of tradedebtor balances.

10.4 Perform a debtors circularisation on asample of debtors. Perform alternativeprocedures where replies are not received

10.5 Investigate large, unusual and creditbalances in debtors listing

10.6 Compare collections subsequent to year-end to debtor listing

10.7 Review slow on non-moving debts withreference to aged listing, post balancesheet receipts and discussion with client.Consider providing for bad debts.

10.8 Where any amount has been estimated,assess the reasonableness of anyestimations made by management.

10.9 Compare the number of days sales in tradedebtors for the period (or debtor days)with that of the previous periods andexplain variations

10.10 Review the debtor list compared with thedebtor list from the previous period andcorroborate with documentary evidencereasons for new names or names that areno longer present.

CONCLUSION


Senior Cleared



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Completed by senior




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11 Other receivables and prepayments O C A F L E R C P

11.1 Prepare a lead schedule of other debtors &prepayments

11.2 Compare balances to previous years andobtain explanations for major changes

11.3 Give a broad description of the variousitems

11.4 Confirm the calculation of prepayments


CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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12 Bank balances O C A F L E R C P

12.1 Prepare lead schedule

12.2 For all bank accounts:-Obtain a bank reconciliation statement-Verify whether unpresented chequeswere presented in the following year-Vouch other reconciling items

12.3 For all banks with which the clientmaintained accounts during the year:-Obtain copies of loan agreements for anynew borrowings and ensure correctdisclosure in the accounts-Obtain confirmation letters and agreeaccount balances-Review confirmation letters for details ofguarantees/ contingent liabilities andensure adequate disclosure in the financialstatements

12.4 For all loan balances obtain confirmations.

12.5 For all loan balances obtain copies of loanagreements and ensure agreement hasbeen followed.

12.6 Consider whether any borrowing facilitieslimit has been exceeded during the periodand whether any other covenants havebeen complied with throughout theperiod.

12.7 Ensure terms of loans, securities pledgedand renewal dates are disclosed.

12.8 Examine receipts and payments recordsfor any large or unusual items immediatelybefore or subsequent to the period end;verify to supporting documentation

CONCLUSION


Senior Cleared



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Completed by senior




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13 Cash balances O C A F L E R C P

13.1 Prepare schedule of cash balances andagree to the general ledger

13.2 Review cash balance throughout the yearand obtain explanations for unusualfluctuations

13.3 Ensure that any post-dated chequesincluded in cash have been depositedafter the year-end

13.4 Count cash if material and agree to cashbalance in the petty cash book

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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14 Trade payables O C A F L E R C P

14.1 Prepare lead schedule and ensureclassification is appropriate between lessthan and greater than one year. Obtainexplanations for significant movements.

14.2 Obtain and verify explanations forchanges in supplier base

14.3 Calculate creditor days and obtainexplanations for significant changes.

14.4 Obtain a creditors listing and reconcile tothe accounts

14.5 Check the casting of the list of creditorbalances.

14.6 For a sample of suppliers agree balanceper books to suppliers' statements

14.7 For a sample of suppliers, obtainconfirmations of balances. Performalternative procedures where replies arenot received.

14.8 Review prior period list of trade creditorsfor potentially significant omissions in thecurrent period.

14.9 Enquire if there are any disputed creditoraccounts.


14.11 Schedule and agree balances with groupand other affiliated undertakings.

14.12 Investigate significant debit balances inlist of trade creditors and accrue formissing invoices if necessary to maintainappropriate cut-off.

CONCLUSION



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Senior Cleared




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Completed by senior




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15 Other payables O C A F L E R C P

15.1 Prepare a lead schedule of other creditorsand accruals, compare balances toprevious years and obtain explanationsfor major changes

15.2 Give a broad description of the variousitems

15.3 Check calculation of material accruals

15.4 Agree SI contributions, pensions andPAYE creditor to post year-end payments

15.5 To the extent not covered in the banksection, obtain confirmations for materialloans.

15.6 Check details of any security held bycreditors, including reservation of titleclauses.

15.7 Check to source documentation formaterial accruals and other creditors.

15.8 For new hire purchase contracts obtaincopies of all new agreements and cross-reference to fixed asset additions.

15.9 For all hire purchase balances prepare aschedule reconciling the outstandingbalance and capitalised interest for eachagreement at the beginning and end ofthe year and agree hire purchase interestreleased during the year to the profit andloss account.

CONCLUSION


Senior Cleared





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16 Provisions O C A F L E R C P

16.1 Obtain or prepare a lead schedule.

16.2 For all provisions made in prior periods,compare actual results or outcomes toestimates made. Understand anddocument reasons for variances.

16.3 Obtain supporting evidence for allprovisions made by the entity.

16.4 For all provisions made by the entityconfirm that the events giving rise to theprovision occurred prior to the balancesheet date.

16.5 For all provisions made by the entity,confirm the basis of calculation.

16.6 For provisions made in respect of legalclaims, obtain a letter from the client'ssolicitor and consider the contents.

16.7 Include in representation letter.

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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17 Share capital O C A F L E R C P

17.1 Prepare lead schedule.

17.2 Agree authorised capital to Memorandumof Association and issued share capital toregister of members (For clients wherechanges to capital are effected throughour office agree changes tocorrespondence in Permanent audit fileor annual return)

17.3 Obtain documentary evidence that shareissues in the year have been;-properly authorised,-registered with the Registrar,-properly disclosed in the notes to FS anddirectors report.

17.4 Confirm the amount and treatment of theproceeds of any issue of shares in theperiod.

17.5 Confirm that any dividends paid andpayable are:-Authorised,-Paid from distributable reserves,-Declared in GM before the year end tobe accounted for in the year,-If proposed or declared after the yearend are simply disclosed in the financialstatements and directors report.

17.6 Note, and confirm to details held by theRegistrar, the names and other details ofdirectors who held office during theperiod together with changes since thebalance sheet date.

1 2 3

17.7 Note, and confirm to details held by theregistrar, the name of the companysecretary(s) holding office during theperiod together with changes since thebalance sheet date.

1 2 3

17.8 Note and confirm the director(s) to retireby rotation, if applicable. 1 2 3

17.9 Review the search of the entity’sstatutory registers, if obtained. 1 2 3

17.10 Confirm that the entity’s statutoryrecords are up to date. 1 2 3


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17.11 Examine minute books and file copies ofrelevant minutes, or extracts thereof, ofdirectors’ meetings held during the periodand thereafter through to date ofsignature of the audit report. Addextracts of relevant information torelevant file sections.

1 2 3

17.12 Review information within and associatedwith the financial statements that is notsubject to audit (ie directors report) andconfirm that no disclosures or statementsmade therein are inconsistent withknowledge of the entity obtained as partof audit procedures. Any instances ofinconsistency or inaccuracy should bedocumented.

1 2 3

CONCLUSION


Senior Cleared




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Completed by senior




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18 Reserves O C A F L E R C P

18.1 Agree opening balances with prior year'sfile

18.2 Prepare a schedule showing allmovements in reserves during the year

18.3 Confirm that all reserves of movementsare permitted or required to be takendirectly to reserves.

18.4 Confirm that all reserves of movementshave been properly recorded at thecorrect amount.

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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19 Revenues O C A F L E R C P

19.1 Prepare lead schedule showing all categoriesof revenues and investigate new sourcesand discontinued.

19.2 Discuss with management whether therehave been any significant changes to scopeof business, trading mechanisms or terms,customer base or market locations,promotional efforts. Consider potentialeffects within analytical review.

19.3 Undertake appropriate analytical proceduresto obtain audit assurance concerningturnover, to include Gross margin analysisfor five periods, including explanations,Comparison with industry trends,Extrapolation from previous periods,Comparison with client budgets.

19.4 Review revenue recognition policy in thefinancial statements and confirmtransactions have been treated accordingly.

19.5 Vouch a sample of receipts to: Salesinvoices, Despatch records, Stock records,where available, Time records, or otherappropriate evidence of provision of services

19.6 Check a sample of sales invoices forcorrectness of: Pricing, Arithmeticalaccuracy, Sales taxes.

19.7 Vouch a sample of items from dispatchrecords to invoices, checking that pricing iscorrect.

19.8 Select a sample of consecutive sales fromthe period and check numerical continuity ofsales invoices. Obtain explanations formissing invoices.

19.9 Select a sample of credit notes and ensurethat they are properly authorised andincluded in the accounting records on atimely basis.

19.10 Check credit notes issued after the end ofthe period and ensure that provision is madefor any relating to sales recorded in theperiod.


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19.11 Consider whether there are any other itemsof income that have not been tested, anddesign appropriate audit tests wherenecessary.

19.12 Check sales invoices from both sides of thebalance sheet date and ensure that: Theyare allocated to appropriate accountingperiods, The goods have been reflectedconsistently in stock.

19.13 Obtain and verify an analysis of all profit andloss account headings down to operatingprofit, analysed between discontinued,acquired and other continuing activities.

19.14 Consider disclosures in respect of differingbusiness sectors in accordance with IAS14for listed companies only.

19.15 Compare other income sources with priorperiod and enquire as to reasons fordiscrepancies.

19.16 Test all non-trading income accounts toreceipts, returns records and otherappropriate supporting documentation.

CONCLUSION


Senior Cleared




Signature Date

Completed by senior




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20 Cost of sales and Expenses O C A F L E R C P

20.1 Prepare separate lead schedules for cost ofsales and other expenses.

20.2 Undertake analytical review procedures forother expenses including: Expensecomparison with previous periods,Extrapolation from previous periods,Comparison with entity budgets. Investigateany significant movements.

20.3 Undertake appropriate analytical proceduresto obtain audit assurance concerningpurchases, to include: Gross margin analysisfor five periods, Extrapolation from previousperiods, Comparison with entity budgets.

20.4 Vouch a sample of purchase invoicesreceived in the period, ensuring: They areaddressed to the entity,-They are for goods or services normallyused by the entity,-They have been authorised by appropriateindividuals, -Sales taxes have been correctly calculatedand treated-They have been properly recorded in thenominal ledger.

20.5 Vouch a sample of purchases from deliverynotes and goods received confirmations toinvoices.

20.6 Review overhead accounts, considerwhether items are tax allowable and ensurethere is adequate information in our file fordisclosure purposes. Give specialconsideration to the following: interest, hireof machinery, rent, travelling abroad,commissions, subcontracted work, legal &other professional fees, subscriptionscontributions and donations, bad debts,insurances

20.7 Verify accuracy of cut-off by checkingpurchase invoices around the end οf theperiod and ensure that: They areallocated to appropriate accounting periods,The goods have been correctly treated instock.-


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20.8 Where any expense has been estimated,assess the reasonableness of anyestimations made by management.

20.9 Review repairs & renewals accounts forcapital items

20.10 Check a sample of expense invoicesreceived in the period, ensuring that:-They are addressed to the entity-They are for goods or services normallyused by the entity-They have been authorised by appropriateindividuals-Sales taxes have been correctly calculatedand treated

20.11 Ensure that the basis of allocation betweenexpense accounts is consistent withprevious periods.

CONCLUSION


Senior Cleared




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Completed by senior




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21 Payroll expenses O C A F L E R C P

21.1 Prepare lead schedule and obtainexplanations for significant movements.Corroborate.

21.2 Obtain a copy of IR7 as filed with the taxauthorities and agree gross pay per IR7 tosalaries & wages cost in the financialstatements

21.3 Prepare a schedule of contributions frompayment slips and agree employeecontributions in total to IR7 and employerscontributions to the profit & loss account

21.4 For a sample of employees agree gross payto SI cards

21.5 Perform an overall reasonableness test bytaking the average number of employees inthe year and multiplying by the averagesalary making the necessary adjustmentsfor timing. Compare your result(expectation) with the actual charge in thefinancial statements and investigatematerial differences.

21.6 Select a sample of employees from thepayroll and meet them.

21.7 Verify that contributions to pensionschemes have been properly and accuratelyrecorded.

21.8 Obtain a listing of employee numbers.

CONCLUSION


Senior Cleared





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22 VAT O C A F L E R C P

22.1 Prepare a schedule summarising details onVAT returns for the period and- Reconcile VAT outputs to sales for theyear- Compare VAT on outputs/inputs to totaloutputs/inputs for each period andinvestigate unusual relationships

22.2 For a sample of inputs check VAT treatmentand in particular ensure that disallowableVAT has not been claimed. Disallowableitems include expenditure on: - immovableproperty; - tobacco & alcohol; -entertainment; - saloon motor vehiclesincluding fuel and repairs

22.3 Reconcile VAT account to VAT returns

22.4 Check after date payment of VAT to bankstatement for amount and deadline.

22.5 Discuss any correspondence from the VATauthorities with senior staff at the client andconsider the risk of penalties. Documentyour findings.

CONCLUSION


Senior Cleared




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Completed by senior




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23 Taxation O C A F L E R C P

23.1 Prepare a statement of tax accounts givingdetails of all movements during the year

23.2 Obtain copies of receipts for payment oftaxes and check

23.3 Ensure interest paid on taxes is correctlytreated as a disallowed expense

23.4 Obtain or prepare the tax computation forthe year and discuss with the client. Reviewfor reasonableness.

23.5 Obtain an explanation for any significantchange in the annual tax charge comparedto prior year and document. Review forreasonableness.

23.6 Document any disputes and investigationscurrently underway with the tax inspectorand document an opinion as to theexpected resolution.-

23.7 Verify reasonableness and accuracy of taxyear end creditor (or debtor).

23.8 Verify that deferred tax is calculated in fullon all temporary differences under theliability method using the applicable taxrates

CONCLUSION


Senior Cleared





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24 Related party transactions andbalances

O C A F L E R C P

24.1 Prepare a lead schedule and obtainexplanation for new parties and parties noton it.

24.2 Obtain or prepare a list of all related parties.

24.3 Review board and other minutes forreferences to potential related parties.

24.4 Obtain confirmations for all material relatedparty balances

24.5 Obtain or prepare a schedule of alltransactions with directors and theirconnected persons, including guarantees,deposits, transfers of intellectual propertyand other information or expertise.

24.6 Obtain explanations for movements incurrent accounts of directors and relatedpersons and prepare a summary statementfor each account. In particular collect detailsof personal drawings, such as income taxand social security payments, university feesfor children and capital expenditure.Calculate monthly interest on debit balancesand take this into account in computation oftaxable profit.

24.7 Note and confirm directors' beneficial andtrust shareholdings at the beginning of theperiod (or date of appointment if later) andthe end of the period, in the entity, othergroup undertakings and other relatedundertakings.

24.8 Note and confirm any directors’ shareoptions.

24.9 Obtain or prepare a schedule of alltransactions with related parties other thandirectors and their connected persons,including guarantees, deposits, transfers ofintellectual property and other information orexpertise.

24.10 Consider whether the entity obtains orprovides any services to related partieswithout charge, and provide a schedule ofany such transactions.


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24.11 Obtain proof of the controlling party of theentity, or that there is no such party.

24.12 Check supporting evidence that transactionswith related parties were on an arm’s lengthbasis.

24.13 Obtain for disclosure purposes, thecompensation details of the directors.

24.14 Obtain for disclosure purposes, the analysisof balances and transactions with relatedparties.

CONCLUSION


Senior Cleared




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Completed by senior




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25 Contingencies and commitments O C A F L E R C P

25.1 Obtain or prepare a schedule of allcontingent liabilities identified by the entity.Review supporting evidence for each matteridentified

25.2 For all contingent liabilities, ensure that theevent giving rise to the contingency occurredprior to the balance sheet date.

25.3 Review confirmation letters from financialinstitutions for disclosures in connection withguarantees, future contractual obligations orsimilar.

25.4 Review solicitors’ letters for potentialliabilities in respect of litigation or similar.

25.5 Review legal and professional fees todetermine if there are any matters underconsideration that might result in acontingent liability.

25.6 Obtain supporting evidence for allcommitments identified by the entity.

25.7 Check the disclosure of all commitments andcontingent liabilities for both period andamount. (Financial statements: T)

CONCLUSION


Senior Cleared




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Completed by senior



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Documents

Sample Audit Procedures