REVIEW OF OTHER AUDITORS WORK - AIDE-MEMOIRE
AUDIT CHECKLIST
Name of the Company
Address of company
Year ended
PAN No.
Partner Name
Signature
ManagerNameSignature
Prepared byNameSignature
Date of commencement of Audit
Date of Report
Financial statements
Detail of Audit Team1.
2.
3.
4.
Fixed AssetsYes/No/NAFurther information/details as
appropriate
Please summarise your audit approach to:
Verifying the completeness of property, plant equipment and
other tangible assets e.g. by vouching additions and disposals and
inter group transfers;
Verifying the existence and ownership of: properties; and other
assets e.g. physical inspection of assets and examination of title
deeds.
Verifying the valuation (including method of valuation) of fixed
assets
If any documents of title are held other than by bankers and
mortgagees, please give details and the reason why such documents
are so held.
Is the company's policy of capitalisation and depreciation in
accordance with applicable Accounting Standards, if any, and
consistent with the previous year?
If no, please provide further details
Have the details of leases that should be capitalised been
reported in the [financial statements].
If no, please provide further details
Are you satisfied that there is no permanent impairment (AS-28)
in the value of the company's fixed assets below the net book
amounts?
Please give brief summary of verification procedure.
If no, please provide further details
Please give details of asset revaluations during the year and
indicate whether based on professional valuation or director's
estimate.
Is depreciation provided on all items of Fixed Assets (other
than land) not fully written off or carried at salvage value?
If no, please provide further details
Are you satisfied that there are no exceptional or additional
depreciation charges, or circumstances that could warrant such
charges in the future?
Have idle facilities been separately identified and accounting
treatment for such assets disclosed in the company's [financial
statements]?
If no, please provide further details
Have the details of any assets which are the subject of an
instalment purchase arrangement been reported in the financial
statements or supporting data?
If no, please provide further details
Did you encounter any difficulties in assessing the estimated
lives of fixed assets?
If yes, please give details including situations where a
permanent diminution has occurred.
Are you satisfied that costs of repairs and maintenance are
properly charged to operations and have not been carried as an
asset?
If no, please provide further details
Where the company has assets in the course of construction, can
you confirm that you are satisfied that the basis used for
capitalising interest and/or indirect expenses is appropriate.
If you are unable to confirm, please provide further
details.
Have you reviewed transactions recorded as construction in
progress and reasonably determined that there are no amounts that
should have been charged to operations?
If no, please provide further details
Are you satisfied th
investmentsYes/No/NAFurther information/details as
appropriate
Did you verify the existence and ownership of significant
investments?
If no, provide details of the alternative procedures
performed
How have you satisfied yourself as to the valuation of unquoted
investments?
How have you satisfied yourself as to the valuation of quoted
investments?
Are you satisfied that there has been no other-than-temporary
impairment requiring the write-down of the carrying amounts of any
investments?
Have investments where the company is able to exercise
significant influence over the operating and financial policies of
the investee corporation been properly accounted for in accordance
with [AS/ GAAP]
If no, please provide details.
In respect to the investee corporation financial statements that
were used as a basis for current year's earnings under the equity
method of accounting:
a. Did the statements cover the same period as that for the
company upon which you are reporting?
b. Were the financial statements audited and an unqualified
opinion expressed? Please provide a copy of the statements. Have
you reviewed the transactions with the company's investees and
confirmed balances with them?
c. Have inter company profits been eliminated before including
the company's proportionate share of operations?
Have marketable equity securities been accounted for in
accordance with [AS/ GAAP], and have the disclosures required been
given in the [financial statements]?
If no, provide details.
Have significant gains or losses on disposals, or changes in
market value, between the dates of the balance sheet and your
opinion, been disclosed in the company's financial statements or
the consolidation accounting package?
If no, provide details.
Intangible assetsYes/No/NAFurther information/details as
appropriate
Have goodwill and other intangible assets been appropriately
accounted for in accordance with [AS/GAAP]
Have you verified the ownership of assets, such as patents and
trademarks?
If no, please provide details of the alternative procedures
performed
How have you satisfied yourselves that the company's intangible
assets have been appropriately tested for impairment and their
carrying values adjusted, if necessary, in accordance with [AS/
GAAP]
If no, provide details
Have all intangible assets been correctly classified and
disclosed in the [financial statements],?
If no, provide details
Is the amortisation policy consistent with prior years and
reasonable with regards to residual values and useful lives?
If no, provide details
Are the residual values and useful lives assigned to intangible
assets reasonable with regard to the nature of the asset and in
accordance with AS/GAAP].
If no, provide details
I NVENTORY
Yes/No/NAFurther information/details as appropriate
Was a physical inventory count carried out at the balance sheet
date?
If no, please provide details of the methods used by the company
to verify inventory at the balance sheet date and the audit
procedures performed.
If yes, was a comparison made between inventory records and
quantities counted, were differences investigated, explained, and
adjusted on the records, and did you test such comparisons?
If no, please provide details
Did you attend the physical inventory count(s)
If yes, please give details of the locations visited
If no, please provide details as to how you have satisfied
yourself as to the physical quantities existing at the balance
sheet date
Did you satisfy yourselves, by observations during the physical
inventory count, that the company's methods were satisfactory?
Did you perform test counts and check the results with final
inventory listings, to establish the reliability of the company's
counting?
If not, provide details of the alternative procedures
performed.
If the year-end inventory figures are determined wholly or in
part from perpetual inventory records, did your procedures
include:
a. Observation of cycle counts and appropriate testing?
b. Checking of test counts to the records to determine that the
records have been adjusted to agree with the physical counts?
c. Substantiation of the quantities on hand of selected items at
year-end by physical inspection and checking with records?
d. Determining that a proper cut-off was made?
e. Testing arithmetic accuracy and compilation of records from
receiving and shipping documents relating to the receipt and
transfer of goods?
If not, provide details of the alternative procedures
performed.
Were any inventories held by third parties at the balance sheet
date?
If yes, have you obtained direct confirmation of inventories
held by third parties at the balance sheet date, or, if material,
did you observe the counting of such inventory?
If no confirmation obtained, provide details of the alternative
procedures performed.
Did you test cut-off with particular reference to sales and
purchases, work in progress transfers, and intercompany or
interdepartmental transfers?
If not, provide details of the alternative procedures
performed.
Have you tested the arithmetical accuracy of final inventory
figures, including computations, footings, checking from original
count sheets, and reconciliation with the general ledger?
If not, provide details of the alternative procedures
performed.
Are the bases of inventory valuation (i.e., raw materials, work
in progress, and finished goods):
Consistent with the prior year?
In accordance with [AS/GAAP] Have full details of these bases
been supplied to us?
If not, provide details, including the audit procedures
performed.
Were there any areas where you has difficulty establishing
whether the value of inventory is fairly stated and in accordance
with [AS/GAAP]?
If yes, provide further details
Do costs include an appropriate proportion of manufacturing, but
not administrative or selling overhead, and is the allocation of
expense between manufacturing overhead, administration, and selling
expenses on a reasonable and consistent basis?
Does the inventory valuation exclude research and development
expenditure?
If not, provide details, including the audit procedures
performed.
If standard costs are used:
a.Have they been updated to reflect current operations?
b.Is an adjustment to actual made where variances appear to
require it?
c.Have you tested computations from product specifications?
If not, provide details, including the audit procedures
performed.
If job order or process costs are used, have you tested the
build-up of costs from records of expenditure on labour, materials,
and overhead?
If not, provide details, including the audit procedures
performed.
Have you tested to ascertain that inventories have been valued
at the lower of cost or market?
i) Market should not exceed the net realizable value (i.e.,
estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal) and
ii) Market should not be less than net realizable value reduced
by an allowance for an approximately normal profit margin.
Please provide details of all provisions made against inventory,
including any general provisions.
Have satisfactory explanations been given to you regarding
material fluctuations in rates of gross profit, inventory levels,
and differences between book and physical quantities?
If not, provide details, including the audit procedures
performed.
Long Term Contracts
Are you satisfied that long term contracts and any resulting
provisions have been properly accounted for under [AS/GAAP]
If not, please provide details, including the audit procedures
performed
Are you satisfied that inventory has been correctly classified
between raw materials, work in progress and finished goods?
If no, provide further details
ReceivablesYes/No/NAFurther information/details as
appropriate
Are you satisfied with the procedures for cut off and have you
tested for periods just before and after year-end?
If not, provide details of alternative procedures performed
Have you performed an accounts receivable circularisation?
If yes, please provide a summary of the results of the
circularisation.
If no, please provide details of the alternative procedures
performed to satisfy yourself as to the validity of accounts
receivable
If confirmation procedures were carried out at other than the
balance sheet date, please provide details of the rollforward
procedures undertaken?
How have you satisfied yourself that the company has a
satisfactory procedure for identification, control, and recovery of
past due accounts?
Does the company have a consistent policy of providing
allowances for uncollectible and doubtful debts, and do you
consider the provision adequate, but not excessive?
If not, provide details of alternative procedures performed
Have you obtained reasonable explanations of trends in the ages
of the receivables, and ratios of sales to receivables, allowances,
and bad debts?
If not, provide details of alternative procedures performed
If any receivables have arisen other than as a result of normal
operations, provide details as to how have you adequately satisfied
yourself as to their validity and collectibility?
Have you obtained third party confirmation in instances where
material amounts have been factored?
If not, provide details of alternative procedures performed
How have you satisfied yourself that the provision for credits
issued post year end and other write-offs is adequate at the
balance sheet date?
Are any goods sold on approval or on a sale or return basis?
If yes, how have you satisfied yourself that these transactions
have been accounted for correctly under [AS/GAAP], including any
resulting provisions.
Have you determined through normal audit procedures that no
receivables are pledged or hypothecated except as disclosed?
If not, provide details of alternative procedures performed
Have long-term loans been confirmed by the borrower?
If not, provide details of alternative procedures performed.
If any receivables are the result of sales on instalment
agreements, have details been provided in the financial
statements.
Have you obtained third party confirmation in instances where
material amounts have been factored?
Have receivables and sales for goods in the hands of customers
on a contingent basis (e.g., on approval, on sale or return) at
year-end been eliminated from the receivables and sales and has the
value of such goods been included in inventories?
If the company bills customers before shipping the
merchandise:
Have you ascertained that billings for unshipped goods at
year-end have been eliminated from receivables and sales and has
the inventory value of such goods been included in inventories?
In those unusual cases under "bill and hold" arrangements with
customers where title has passed to the customer for such unshipped
goods, have you ascertained that such "bill and hold" accounting is
appropriate and have been confirmed?
Please provide details of any other receivables in the financial
statements, along with details of the audit procedures
performed.
Cash & BankYes/No/NAFurther information/details as
appropriate
Have you obtained direct confirmation of all bank balances, bank
facilities and related guarantees and that there was no other
information contained in the bank's reply which should be brought
to our attention.
If no, please provide further details.
Provide details of the audit procedures performed to ensure that
bank cut-off procedures have been performed correctly.
Have any large or unusual transfers between bank accounts,
affiliates, subsidiaries, or other unusual transactions, occurring
just before or after year-end, been adequately explained.
Please give brief summary of your verification procedure.
Where material cash in hand balances existed at the balance
sheet date, were such balances (or a sample of them) were counted
by you at that date. Please give details of the locations visited
and the results obtained.
If no physical counts were undertaken, please give details of
the verification work carried out.
Please give details of any right of setoff in respect of the
company's balances with those of other members of the group.
Are you satisfied with daily cash balances
Please explain the reason for any unusual balance during the
year
Are you aware of any restrictions, which might limit the
company's ability to remit funds to the country in which its parent
company is registered?
If yes, please give further details.
Are cash balances, overdrafts and loans are correctly classified
and full disclosure of any security given has also been disclosed
in the financial statements.If no, please give further details.
Have bank balances been verified and have other related matters
confirmed by the banks been properly reflected in the financial
statements
If no, please provide details of alternative procedures
performed
Liabilities and provisionsYes/No/NAFurther information/details
as appropriate
How have you verified accounts payable?
How have you satisfied yourself that there are no recorded
liabilities or provisions that are materially less than or in
excess of requirements?
Have you made tests of un-entered invoices, cash disbursements,
and unmatched receiving reports for the period after the balance
sheet to determine that adequate accruals were provided?
If no, provide details of alternative procedures performed.
Have all liabilities or contingent liabilities relating to
employee benefits (e.g., termination pay, etc.) been recorded or
disclosed in the financial statements.
If no, provide further details
Are all material liabilities and accruals recorded disclosed in
the financial statements
If no, provide further details.
Is the basis of deferring income in compliance with [AS/GAAP],
reasonable and consistent with the prior year?
If no, provide details.
With respect to provisions established for specified purposes,
have you ascertained that charges against those provisions are in
accordance with the intent of the account and should not have been
charged directly against income?
Have costs associated with exit from or disposal of activities
been properly accounted for and recorded in accordance with
[AS/GAAP]?
If no, provide details
If the company has received any government grants in purchasing
fixed assets, are you satisfied that no event has occurred which
could render such grants liable to repayment?
If no, please provide further details.
Where the company has assets held under finance leases, please
give details of how such assets and the related liabilities have
been treated in the accounts.
Please give details of any creditors which are secured and the
nature of the security. Please include items covered by reservation
of title clauses.
Does the client have any debt?
If yes, have confirmations been obtained from lenders for
material loans?
If no confirmations have been obtained, please provide details
of alternative procedures.
Have you agreed new debt transactions to authorizations and cash
receipts?
If no, provide details of alternative procedures performed.
Have you confirmed debt paid off or otherwise extinguished
during the period?
If no, provide details of alternative procedures performed.
If debts have been extinguished, have any resulting gains and
been properly accounted for and recorded in accordance with
[AS/GAAP]?
If no, provide details
How have you satisfied yourself as to un-issued debentures,
bonds, notes, etc.?
Has the company complied with restrictions or covenants imposed
either by regulations or by the terms of the lending
agreements?
If no, provide details of any breaches, including any resulting
action taken by the company.
Are you satisfied that the company have not breached any
borrowing restrictions contained in their [Memorandum and Articles
of Association/other documents]?
If no, please give further details.
Is all debt adequately disclosed in accordance with [AS/GAAP] in
the financial statements.
If no, provide details.
Does the company's financial statements provide full details
of:
Interest rates?
Repayment terms?
Security and guarantees?
Restrictive covenants?
If no, provide details.
Does the company make regular provision for costs of repairs and
replacements required under the terms of any long-term leases?
Please provide details of any other liabilities or provisions in
the financial statements, along with details of the audit
procedures performed.
Derivatives and other financial instrumentsYes/No/NAFurther
information/details as appropriate
Does the client have any derivative transactions as defined by
[AS/GAAP]?,
If yes, how have you satisfied yourself that all derivative
transactions, as defined by [AS/GAAP]?, including embedded
derivatives, were identified and captured in the accounting
system?
Did you obtain (a) an understanding of the clients control
environment and the specific controls surrounding derivative
transactions and (b) any written client policy statement?
If no, please provide details of the alternative procedures
performed.
Are all derivatives recorded as assets or liabilities at their
fair values and has the clients methods of valuing derivative
instruments been evaluated?
If no, provide details.
For derivatives accounted for as hedges under [AS/GAAP], is
there adequate contemporaneous documentation and has a quarterly
reassessment been made?
If no, provide details.
Have appropriate derivative disclosures been made, as required
by [AS/GAAP]
If no, provide details
Intercompany/related party transactionsYes/No/NAFurther
information/details as appropriate
Have all group balances been shown separately within debtors and
creditors?
If no, please give further details.
Please give details of balances due from related/connected
parties that are not part of the group.
Please give details of any right of setoff in respect of the
company's balances with those of other members of the group.
Are there:
Emoluments paid or credited to directors who are also directors
of the parent company and/or;
Capital commitments with group companies.
If yes, please give further details.
Does the company require financial support from the holding
company or another group company to continue trading?
If yes, please confirm that you have received the necessary
confirmation of financial support in writing and name the company
giving the support.
Is this sufficient to enable you to issue an unqualified audit
report in respect of this matter?
TaxationYes/No/NAFurther information/details as appropriate
Please provide copies of:
The tax computations for the current year;
The taxation account; and
The reconciliation of the actual tax charge to the profit before
taxation.
Have the tax provisions been audited by the audit engagement
team.
If no, provide details of alternative procedures performed
Has adequate, but not excessive, provision been made for taxes
payable, and in particular in relation to profits, distributions,
and capital gains?
If no, provide details
Has the company complied with regulations of the taxing
authorities that could have a material effect on its financial
statements?
If no, provide details
Have previous years' liabilities been agreed to returns filed
with the taxing authorities?
Have you reviewed correspondence with the taxing authorities,
returns filed with them, and payments made during the year?
If no, provide details as to the alternative procedures
performed to satisfy yourself as to the status of taxation
liabilities from prior years.
Is the client in dispute with the tax authorities?
If yes, please provide details, including the audit procedures
performed to ensure that all relevant items are accrued or
disclosed in the financial statements.
Are you satisfied that deferred tax has been provided for in
accordance with [AS/GAAP].
Provide details of the procedures performed, including a summary
schedule supporting the deferred tax amounts in the financial
statements..
shareholders EquityYes/No/NAFurther information/details as
appropriate
Are the amounts and descriptions of share capital authorized,
issued, and outstanding in accordance with the legal instruments,
that regulate the company, and in accordance with statutory
requirements?
If no, provide details
Have there been any changes in share capital in the year
If yes, were the changes:
Properly authorized as required by regulations of the company
and by statute?
Adequately disclosed in the [financial statements /consolidation
package]?
Vouched by you with cash proceeds or disbursements, or other
receipts or distributions of property?If no, provide details.
Where an independent transfer agent keeps the companys share
register, have you obtained confirmation of shares issued and
outstanding?
If no, provide details of the alternative procedures
performed.
If share capital has been issued for consideration other than
cash, how have you been able to satisfy yourselves that a fair
value has been attributed to the shares and that additional paid-in
capital has been appropriately treated?
If shares or share options have been issued to employees, have
these transactions been accounted for and adequately disclosed in
accordance with [AS/GAAP], as applicable?
Has the company complied with and disclosed in its financial
statements any restrictions imposed by the directors, company
by-laws, statute, or third parties regarding the classification of
reserves, the creation of special reserves, or restrictions on the
application of such reserves?
If no, provide details
Have the tax consequences of any changes in reserve balances
been appropriately treated?
If no, provide details
With respect to special reserves set up through appropriation of
retained earnings, have you ascertained that they are still
required?
If reserves are no longer required, provide details of the
procedures performed to ensure that this movement in reserves has
been correctly accounted for and disclosed under [AS/GAAP].
Are there any dividends in arrears?
If yes, provide details along with the audit work performed.
In the case of dividends accrued but not paid at the date of the
balance sheet, have you supplied us with particulars of the dates
or anticipated dates of authorization, declaration, and
payment?
If no, provide details
If applicable, have financial instruments with both
characteristics of liabilities and equity been appropriately
accounted for and disclosed in the financial statements in
accordance with [AS/GAAP]?
If no, provide details
Income statementYes/No/NAFurther information/details as
appropriate
Have you after an analysis of the income statement accounts
received satisfactory explanations of unusual variations as
compared to previous years and expectations?
If no, provide details of alternative procedures performed
Have extraordinary items or exceptional charges and credits been
disclosed in the financial statements.
Provide details as to the procedures performed to satisfy
yourself as to the completeness and validity of the amounts and
disclosures
Please summarise the approach you adopted to verify the
completeness and accuracy of turnover and cost of sales.
PensionsYes/No/NAFurther information/details as appropriate
Please give details of any pension schemes operated by the
company.
Have all amounts relating to the companys pension scheme(s) been
correctly accounted for and disclosed in accordance with
[AS/GAAP]?
If no, please provide further details.
Have you placed reliance on an actuarial valuation?
If so, provide details as to how you have verified the
professional standing of the actuary and how you have understood
the basis on which the valuation was prepared and the scope of the
work performed.
Commitments and contingenciesYes/No/NAFurther
information/details as appropriate
Have loss contingencies been provided and/or has appropriate
disclosure been made in accordance with [AS/GAAP]?
Have you determined that contingent liabilities have been
properly accounted for and disclosed, including, for example, the
following:
a.Current or imminent litigation, including written inquiry and
response from the company's legal counsel as to the nature of the
matter and the expected outcome?
b.Guarantees given to third parties?
c.Financial instruments (foreign exchange transactions)?
d.Long-term contracts for purchases or sales?
e.Product guarantees and warranties?
f.Claims for back compensation by employees?
g.Possible additional taxes for prior periods?
h.Sale, pledge, or assignment of accounts receivable with
recourse?
i.Endorsement, discount, sale, or transfer of notes, trade, or
bank acceptances?
j.Employment agreements?
k. Inadequacy of the company's insurance?
Can you confirm that all material capital and expense
commitments disclosed in the financial statements.
If no, provide details
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