Defence Audit Guidelines_Final 25 March 2010

8/17/2019 Defence Audit Guidelines_Final 25 March 2010

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DEPARTMENT OF

THE AUDITOR-GENERAL OF

PAKISTAN

GUIDELINES FOR THE AUDIT OF DEFENCE SERVICES

TO BE USED BY

THE DIRECTORATE GENERAL AUDIT (DEFENCE SERVICES)


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Table of Contents

PREFACE.............................................................................. ...........

1. INTRODUCTION TO AUDIT GUIDELINES..........................................

1.1 Purpose of the Guie!i"es.......................................................................................... .....................

1.# Guii"$ Pri"%ip!es.......................................................................................................... .....................

1.& Auitors' Respo"si(i!it)............................................................................................... .....................

1.* Pr+%ti%+! Too!s................................................................................................................. .....................

1., o"ti"uous Ipro/ee"t........................................................................................... .....................

1.0 Usi"$ the St+"+r Auit or2i"$ P+pers........................................................... .....................

1.3 The A%%ou"t+(i!it) )%!e............................................................................................ .....................

2. OVERVIEW OF THE DIRECTORATE GENERAL OF AUDITDEFENCE SERVICES- (NORTH & SOUTH).........................................

#.1. O/er/ie4 of the O5%e................................................................................................ .....................

#.# 6urisi%tio"........................................................................................................................ .....................#.& Or$+"o$r+ of DG7 Auit Defe"%e Ser/i%es....................................................... .....................

3. SCOPE OF AUDIT..........................................................................

&.1 T)pes of Auits............................................................................................................... .....................

&.# De8"itio" of Go/er"e"t Auit............................................................................... .....................

&.& erti8%+tio" Auit.......................................................................................................... .....................

&.* op!i+"%e 4ith Authorit) Auit............................................................................. ...................

&., Iport+"t Auit opo"e"ts of Defe"%e Auit................................................. ...................

4. PERMANENT FILE OF AUDITEE DEPARTMENTS.............................

*.1 I"trou%tio"..................................................................................................................... ...................

*.# The Auit Te+'s Respo"si(i!it).............................................................................. ...................

*.& Do%ue"t+tio" i" Per+"e"t Fi!e........................................................................... ...................

*.* Up+te o"tro! Sheet 9 PF......................................................................................... ...................

*., St+tus of E"tit) 9 For PF-I....................................................................................... ...................

*.0 :+%2$rou" I"for+tio" 9 For PF-II..................................................................... ...................

*.3 List of Auit+(!e Lo%+tio"s 9 For PF-III............................................................... ...................

*.; List of :+"2 A%%ou"ts 9 For PF-Ie Si$"+tories 9 For PF-


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,., Poi"ts for +tte"tio" +t "e@t +uit Cfro !+st )e+r............................................ ...................

,.0 E"tit) %ou"i%+tio" !etter...................................................................................... ...................

,.3 Auit p!+""i"$ eor+"u................................................................................... ...................

,.; Meor+"u o" post-p!+""i"$ %h+"$es............................................................. ...................

,.= Iport+"t +tes............................................................................................................. ...................

,.1? Tour pro$r+e.......................................................................................................... ...................

,.11 I"for+tio" reueste fro e"tit) o5%i+!s....................................................... ...................

,.1# M+teri+!it) +ssesse"t for.................................................................................. ...................

,.1& E@pe%te +$$re$+te error +" p!+""e pre%isio" for................................ ...................

,.1* Auit ris2 +ssesse"t for..................................................................................... ...................

,.1, I"here"t ris2 +ssesse"t for.............................................................................. ...................

,.10 I"ter"+! %o"tro! uestio""+ire - %o"tro!s for o/er+!! e"/iro"e"t...............................

,.13 I"ter"+! %o"tro! uestio""+ire 9 $e"er+! %oputer %o"tro!s.........................................

,.1; I"ter"+! %o"tro! uestio""+ire 9 +pp!i%+tio" %o"tro!s.................................... ...................

,.1= o"tro! ris2 +ssesse"t fors............................................................................... ...................

,.#? A"+!)ti%+! pro%eures +ssur+"%e for................................................................ ...................

,.#1 Sour%e of +uit +ssur+"%e for............................................................................ ...................

,.## List of +pp!i%+(!e !+4s +" re$u!+tio"s............................................................... ...................

,.#& S+p!e se!e%tio" %he%2!ist...................................................................................... ...................

,.#* Hi$h /+!ue ite se!e%tio" for.............................................................................. ...................

,.#, Ke) ite se!e%tio" for............................................................................................ ...................

,.#0 S+p!e si>i"$ for tests of i"ter"+! %o"tro!......................................................... ...................

,.#3 S+p!e si>i"$ for su(st+"ti/e tests of et+i!s................................................. ...................

,.#; he%2!ist of +%%ou"ti"$ esti+tes to (e re/ie4e........................................ ...................

,.#= Poi"ts for +tte"tio" +t "e@t +uit.......................................................................... ...................

,.&? Auit p!+""i"$ %he%2!ist........................................................................................... ...................

,.&1 e"tr+!!) Le Auit..................................................................................................... ...................

6. AUDIT EECUTION PHASE...........................................................

0.1 I"trou%tio"..................................................................................................................... ...................

0.# The Auit Te+'s Respo"si(i!it) i" E@e%utio" Ph+se....................................... ...................

0.& Fors +" S%heu!es for Auit E@e%utio" Ph+se.............................................. ...................

0.* Su+r) of A"+!)ti%+! Re/ie4 Pro%eures Perfore......................................................

0., Det+i!s of A"+!)ti%+! Re/ie4 Pro%eures Perfore......................................... ...................

0.0 op!ete I"ter"+! o"tro! uestio""+ires........................................................ ...................

0.3 I"ter"+! o"tro! De/i+tio"s For............................................................................. ...................

0.; I"ter"+! o"tro! De/i+tio"s Su+r)................................................................... ...................

0.= op!i+"%e Su+r).................................................................................................. ...................

0.1? Su(st+"ti/e Tests of A%%ou"ti"$ Esti+tes...................................................... ...................

0.11 Errors i" A%%ou"ti"$ Esti+tes.............................................................................. ...................0.1# Su(st+"ti/e Test S+p!e Su+r) for e+%h Auit Pro$r+e..................................

0.1& Su(st+"ti/e Test of Hi$h


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0.1; Auit Pro$r+e...................................................Ep!o)ee Re!+te E@pe"se"

0.1= Auit Pro$r+e...............................................................................#

0.#? Auit Pro$r+e........................................................Defe"%e Pro/ie"t Fu""$

0.#1 Auit Pro$r+e............................................................I"ter-E"tit) Tr+"sfers"%

0.## Auit Pro$r+e............................................Goos Ser/i%es Pro%uree"t""

0.#& Auit Pro$r+e or2s CMi!it+r) E"$i"eeri"$ Ser/i%es........................... ...................

0.#* Auit Pro$r+e +sh i" H+":+"2................................................................ ...................

0.#, Auit Pro$r+e o"tr+%ts.................................................................................. ...................

0.#0 Auit Pro$r+e L+" :ui!i"$ CMi!it+r) Est+te O5%e........................ ...................

0.#3 Auit Pro$r+e P+2 Ar) U"itsFor+tio"s.............................................. ...................

&.'# A*t +,o-,ae/ +a0*stan A*, Fo,1e Un*ts 2 Fo,at*ons A*t........................................ ...................

0.#= Auit Pro$r+e P+2ist+" N+/) U"its For+tio"s Auit........................ ...................

!. AUDIT EVALUATION AND REPORTING PHASE................................3.1 I"trou%tio"..................................................................................................................... ...................

3.# The Auit Te+'s Respo"si(i!it................................................................................. ...................

3.& Do%ue"t+tio" i" E/+!u+tio" +" Reporti"$ Ph+se......................................... ...................

3.* I"ter"+! o"tro! e+2"esses 9 Ip+%t A"+!)sis...................................................................

3., A"+!)ti%+! Pro%eure Thresho!s.............................................................................. ...................

3.0 E/+!u+tio" of A"+!)ti%+! Pro%eures....................................................................... ...................

3.3 E/+!u+tio" of I"ter"+! o"tro! De/i+tio"s............................................................. ...................

3.; Su(st+"ti/e Tests E/+!u+tio" 9 ProBe%t+(!e Errors fro S+p!e.................. ...................

3.= Su(st+"ti/e Tests E/+!u+tio" 9 No"-ProBe%t+(!e Errors................................... ...................

3.1? Su(st+"ti/e Tests E/+!u+tio" 9 Su+r).......................................................... ...................

3.11 A%hie/e Le/e! of Assur+"%e For....................................................................... ...................3.1# Error i" E+%h opo"e"t.......................................................................................... ...................

3.1& O/er+!! Error i" Fi"+"%i+! St+tee"ts.................................................................. ...................

3.1* op!i+"%e-ith-Authorit)


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#.3 5e6 Tas0s an Res4ons*b*l*t*es/ A*t ;al*t6 Ass,an1e................................................................

ANNEURE A PERMANENT FILE....................................................

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PREFACE

T7e F*nan1*al A*t


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1. INTRODUCTION TO AUDIT GUIDELINES

1.1 Purpose of the Guie!i"es

T7ese G*el*nes a* to 4,o9*e s4e1*f*1 an eta*le -*an1e to a*to,s en-a-e *n t7e a*t

of Defen1e Se,9*1es. T7e6 o not ,e4la1e t7e F*nan1*al A*t


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1.* Pr+%ti%+! Too!s

FA< *s s44o,te b6 stana, A*t o,0*n- +a4e,s 5*t t7at 4,o9*es t7e a*to, =*t7 4,a1t*1altools fo, 1on1t*n- a*t. T7ese =o,0*n- 4a4e,s a,e a -ene,al*se set of fo,s an s17eleses*-ne to 7el4 ea17 a*t tea 4e,fo, a*t *n 1o4l*an1e =*t7 t7e 4,*n1*4les set ot *n FA


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• +e,anent f*le@

• +lann*n- f*le@

• o,0*n- +a4e, f*le@ o1ent*n- t7e e8e1t*on 47ase@ an t7e

• E9alat*on an Re4o,t*n- f*le

It *s ,e1oene t7at t7e ele1t,on*1 9e,s*ons of fo,s -*9en *n t7e A*t o,0*n- +a4e,s 5*ta,e se ,*n- t7e 1on1t of a*t. T7e a*to, *s ,e*ne of t7e *4o,tan1e of 0ee4*n- ba10?4s of f*lle?ot fo,s (ele1t,on*1 an 7a, 1o46) to ens,e t7at t7e6 a,e aeatel6 4,ote1te.

5*nl6 note t7at ea17 fo, o, s17ele *n1le *n t7e A*t o,0*n- +a4e,s 5*t *n1o,4o,atesnotes on 7o= to se t7e fo,. T7ese notes a,e 4,*nte *n *tal*1s to *ffe,ent*ate t7e f,o ot7e, ate,*al on t7e fo,. In soe 1ases@ t7e note a6 ,elate to a s4e1*f*1 *te on t7e fo,@ *n =7*171ase *t =*ll follo= t7e *te *t ,elates to. Notes t7at a44l6 to t7e fo, as a =7ole a,e 4,esentee*t7e, at t7e be-*nn*n- o, t7e en of t7e fo,.

T7ese G*el*nes o not ,e4eat t7e *nst,1t*ons fo, ea17 fo,. T7*s 4,4ose *s to 4,o9*e

a*t*onal -*an1e s4e1*f*1 to t7e t64e of a*t be*n- 4lanne o, 1on1te. Fo,s ans17eles -*9en *n t7e A*t o,0*n- +a4e,s 5*t essent*all6 eet t7e ,e*,eents of Ce,t*f*1at*on A*t. Ho=e9e,@ soe of t7ese fo,s@ a,0e =*t7 an aste,*s0 ()@ 1an also be sefo, Co4l*an1e =*t7 At7o,*t6 A*t. In bot7 t7e 1ases@ t7e notes on t7e fo, a,e sff*1*ent to-*e t7e a*to, an no a*t*onal *nfo,at*on *s ,e*,e *n t7ese G*el*nes.

Ult*atel6@ *t *s t7e a*t tea leae, =7o =*ll 7a9e to se 7*s27e, -ent *n ete,*n*n- 7o= best to a44l6 t7e A*t o,0*n- +a4e,s 5*t *n 1on1t*n- a s4e1*f*1 a*t.

1.3 The A%%ou"t+(i!it) )%!e

T7e a11ontab*l*t6 161le sta,ts =*t7 t7e 4,e4a,at*on of annal b-et stateent =7*17 *sa44,o9e b6 t7e +a,l*aent. A eta*le elabo,at*on *s as follo=s/

$. Ea17 6ea,@


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2. OVERVIEW OF THE DIRECTORATE GENERAL OFAUDIT DEFENCE SERVICES- (NORTH & SOUTH)

#.1. O/er/ie4 of the O5%e

A*to, Gene,al of +a0*stan *s ,es4ons*ble fo, t7e a*t of all e84en*t,e f,o t7e ,e9enes of +a0*stan. To *s17a,-e 7*s statto,6 ,es4ons*b*l*t6 *n ,es4e1t of e84en*t,e on Defen1e Se,9*1es@t7e A*to, Gene,al 7as 7*s o=n Ins4e1t*on staff =o,0*n- ne, t7e s4e,9*s*on of t7e D*,e1to, Gene,al A*t (Defen1e Se,9*1es)@ *n t7e


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test*n-@ s7ol also se *nfo,at*on -at7e,e ,*n- 9*s*ts to e1ent,al*e lo1at*ons to ete,*net7e le9el of ,el*an1e t7at 1an be 4la1e on *nte,nal 1ont,ols. T7s *n a*t*on to t7e a*t of t7esa4les sele1te *n t7e Cont,olle,s


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#.& Or$+"o$r+ of DG7 Auit Defe"%e Ser/i%es

8


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3. SCOPE OF AUDIT

&.1 T)pes of Auits1

D*,e1to,ate Gene,al A*t@ Defen1e Se,9*1es 1on1ts t7e follo=*n- t64es of a*t/$. Ce,t*f*1at*on A*t#. Co4l*an1e =*t7 At7o,*t6 A*t

A*t*onall6 t7e D*,e1to,ate Gene,al also 1a,,*es ot s4e1*al a*t an s4e1*al st*es.

(he !ollo)ing 'ection de!ine' Certi!ication audit, Co$pliance )ith Authorit* audit.

&.# De8"itio" of Go/er"e"t Auit

A11o,*n- to t7e INTOSAI A*t*n- Stana,s@ t7e fll s1o4e of -o9e,nent a*t*n- *n1les

,e-la,*t6 an 4e,fo,an1e a*t. Re-la,*t6 a*t 1o4,*ses of t7e attest of F*nan1*alStateents 1alle Ce,t*f*1at*on A*t an Co4l*an1e =*t7 At7o,*t6 A*t. Re-la,*t6 a*teb,a1es/$. Attestat*on of f*nan1*al a11ontab*l*t6 of a11ontable ent*t*es@ *n9ol9*n- e8a*nat*on an

e9alat*on of f*nan1*al ,e1o,s an e84,ess*on of o4*n*on on F*nan1*al Stateents.'. Attestat*on of f*nan1*al a11ontab*l*t6 of t7e -o9e,nent a*n*st,at*on as a =7ole%. A*t of f*nan1*al s6stes an t,ansa1t*ons *n1l*n- an e9alat*on of 1o4l*an1e =*t7

a44l*1able states an ,e-lat*onsJ. A*t of *nte,nal 1ont,ol an *nte,nal a*t fn1t*onsJ". A*t of t7e 4,ob*t6 an 4,o4,*et6 of a*n*st,at*9e e1*s*ons ta0en =*t7*n t7e a*t ent*t6J

an

&. Re4o,t*n- of an6 ot7e, atte,s a,*s*n- f,o o, ,elat*n- to t7e a*t t7at t7e S4,ee A*tInst*tt*on 1ons*e,s s7ol be *s1lose.

(he !ollo)ing 'ection' pro+ide detailed guidance on Regularit* Audit )hich include'

Certi!ication Audit and Co$pliance )ith Authorit* Audit.

&.& erti8%+tio" Auit

-ecti+e':

To e84,ess an o4*n*on on t7e a11onts to t7e effe1t t7at/

$. T7e F*nan1*al Stateents 4,o4e,l6 4,esent@ *n all ate,*al ,es4e1ts@ t7e -o9e,nentsf*nan1*al 4os*t*on@ t7e ,eslts of *ts o4e,at*ons@ *ts 1as7 flo=s an *ts e84en*t,es an,e1e*4ts b6 a44,o4,*at*onJ

'. Ens,e t7at assesse ,e9ene *s 4,o4tl6 1olle1te an e4os*te *n -o9e,nent t,eas,6an 4,o4e,l6 1lass*f*e *n t7e F*nan1*al StateentsJ an

$ T7ese G*el*nes 4,o9*e -*an1e on bot7 t7e Ce,t*f*1at*on an Co4l*an1e =*t7 At7o,*t6 a*t.

9


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%. T7e ss e84ene 7a9e been a44l*e *n all ate,*al ,es4e1ts@ fo, t7e 4,4osesat7o,*se b6 +a,l*aent an 7a9e@ *n all ate,*al ,es4e1ts@ been boo0e to t7e ,ele9ant-,ants an a44,o4,*at*ons.

F*nan1*al Stateents 7a9e a la,-e nbe, of e8te,nal se,s an *t *s ne1essa,6 t7at t7e F*nan1*alStateents 4,o4e,l6 4,esent t7e f*nan1*al 4os*t*on of t7e a*tee. In o,e, to e84,ess an o4*n*on on

t7e F*nan1*al Stateents@ t7e a*to, 7as to ens,e t7e follo=*n-/

• F*nan1*al Stateents a,e e9alate fo, aea16 a-a*nst +,esentat*on an D*s1los,e

,e*,eentsJ

• S*-n*f*1ant l*ne *tes of F*nan1*al Stateents a,e teste fo, t7e follo=*n- a*t

asse,t*ons/

• E8*sten1e an O11,,en1e

• Co4leteness

•


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". 7*le 1on1t*n- t7e a*t of ,e1e*4ts of t7e Go9e,nents@ t7e A*to,?Gene,al sat*sf*es7*self t7at t7e ,les an 4,o1e,es ens,e t7at t7e assessent@ 1olle1t*on an allo1at*onof ,e9ene a,e one *n a11o,an1e =*t7 t7e la= an t7e,e *s no lea0a-e of ,e9ene =7*17le-all6 s7ol 1oe to Go9e,nent.

&. Re9*e=@ anal6e an 1oent on 9a,*os Go9e,nent 4ol*1*es ,elat*n- to *ffe,ent

se1to,s.

Methodolog*:

• U4at*n- t7e ne,stan*n- of t7e bs*ness 4,o1esses =*t7 ,es4e1t to 1ont,ol st,1t,e.

• Ient*f*1at*on of 0e6 1ont,ols on t7e bas*s of 4,*o, 6ea,s a*t e84e,*en1e 2s4e1*al

*,e1t*ons f,o t7e 7ea off*1e et1.

• +,*o,*t*s*n- ,*s0 a,eas b6 ete,*n*n- s*-n*f*1an1e an ,*s0s asso1*ate =*t7 *ent*f*e 0e6

1ont,ols.

• Des*-n a*t 4,o-,aes *n1l*n- anal6t*1al 4,o1e,es fo, test*n- *ent*f*e ,*s0

1on*t*ons.

• Sele1t*on of a*t fo,at*ons *.e. DDOs on t7e bas*s of/

•


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,e*,e to 4,e4a,e eta*le a11onts of t7e*, 4a6ents an ,e1e*4ts@ =7*17 a,e e,-e=*t7 t7e 1ent,al a11onts 4,e4a,e b6 t7e


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4. PERMANENT FILE OF AUDITEE DEPARTMENTS

*.1 I"trou%tio"

A*t obe1t*9es an 4lans a,e e9elo4e base on an ne,stan*n- of t7e ent*t6s o4e,at*ons.

T7e a*to, nees to 7a9e a eta*le 0no=le-e of t7ose as4e1ts of t7e ent*t6 t7at ,elate to a*tJt7e a*to, s7ol 7a9e 1o-n*an1e abot t7e ot7e, a,eas.

As *ts nae *4l*es@ t7e +e,anent F*le (+F) *s se to 1olle1t *nfo,at*on abot t7e ent*t6 t7at=*ll be sefl not st fo, t7e 1,,ent a*t@ bt also fo, ft,e a*ts of t7e sae t64e fo, t7esae ent*t6. Fo, e8a4le/ *nfo,at*on abot t7e ent*t6s s*e an bs*ness 7el4s *n assess*n-ate,*al*t6J ne,stan*n- t7e ent*t6s o4e,at*ons 1an 7el4 to ete,*ne =7at 1o4onents toa*tJ an@ 0no=*n- t7e t64es of t,ansa1t*ons ente,e *nto b6 t7e ent*t6 7el4s to assess *n7e,ent,*s0s to t7e ent*t6. T7*s *nfo,at*on =*ll be fa*,l6 1ons*stent an ,ele9ant fo, at least a fe= 6ea,sa*ts.

E9en t7o-7 t7e *nfo,at*on on t7e +e,anent F*le *s e84e1te to be sefl a1,oss o,e t7an onea*t 4e,*os@ t7e a*t tea s7ol 9al*ate t7e a11,a16 of t7at *nfo,at*on at t7e t*e of ne8ta*t an 4ate t7e +e,anent F*le =7e,e s*-n*f*1ant 17an-es 7a9e o11,,e.

T7e +e,anent F*le *n1les *nfo,at*on t7at =*ll be of 1ont*n*n- *4o,tan1e to a*t. T7*sa6 *n1le/

• Co4*es of ,ele9ant Go9e,nent le-*slat*on@ ,e-lat*ons@ -*el*nes an ot7e, ,les

affe1t*n- t7e o4e,at*ons of an ent*t6.

• O,-an*at*on 17a,ts@ eta*ls of 0e6 1onta1ts an lo1at*ons of o4e,at*on.

• Role of ent*t6@ V*s*on an


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*.# The Auit Te+'s Respo"si(i!it)

T7e a*t tea *s ,es4ons*ble fo, -at7e,*n- t7e *nfo,at*on ,e*,e to be 4t *n t7e set of =o,0*n- 4a4e,s asso1*ate =*t7 t7e +e,anent F*le. T7ese a,e l*ste *n t7e ne8t se1t*on. T7e 4,e4a,at*on of +e,anent F*le fo, t7e f*,st t*e =*ll be a t*e?1ons*n- e8e,1*se an sff*1*ent

a*t ,eso,1es s7ol be allo1ate to t7*s tas0 *n t7e a*t ,eso,1e 4lan.

Fo, sbseent a*ts of t7e sae t64e fo, t7e sae ent*t6@ t7e a*t tea s*4l6 nees to1onf*, t7at t7e *nfo,at*on *s st*ll ,ele9ant@ an to 4ate t7e +e,anent F*le at 4lann*n- sta-e=7e,e ne1essa,6. T7e ates on =7*17 4ates o11,,e s7ol be ,e1o,e on t7e U4ateCont,ol S7eet (Fo, +F) 4,o9*e.


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*.* Up+te o"tro! Sheet 9 PF

T7e +e,anent F*le s7ol be 4ate ea17 6ea, at t7e 4lann*n- sta-e. T7*s fo, s7olo1ent t7e nae of t7e 4e,son ,es4ons*ble fo, 4at*n- *t.

*., St+tus of E"tit) 9 For PF-I.

T7e a*to, s7ol o1ent on t7*s fo, t7e 4,*n1*4al a,ess@ stats (=7et7e, *t *s a Fee,al o, a +,o9*n1*al -o9e,nent@ se*?-o9e,nent@ self a11ont*n-@ 1ent,al*e o, e8e4t a11ont*n-ent*t6@ et1.) an *ts ,elat*ons7*4 =*t7 ot7e, -o9e,nent e4a,tents2*n*st,*es (atta17ee4a,tent@ b,an17 off*1e@ et1).

*.0 :+%2$rou" I"for+tio" 9 For PF-II.

T7e a*to, s7ol -at7e, f*nan1*al an ot7e, ba10-,on *nfo,at*on abot t7e ent*t*es =7*17

a,e ,e4,esente *n t7e F*nan1*al Stateents of efen1e. T7*s *n1les *nfo,at*on abot totale84en*t,e of t7e ent*t6@ o4e,at*onal a1t*9*t621o,4o,ate 4lan of t7e ent*t6 l*0e o,-an*at*onst,1t,e@ a*n fn1t*ons@ et1.

• E84en*t,es *n1,,e b6 t7e *9e,se ,an-e of o,-an*at*ons =*t7*n t7e


22/146

*.1? E@ter"+! F+%tors 9 For PF-


23/146

Note: The above list is not comprehensive it may include other additional records to support the

nature of activities an auditee is involved in.

A''*+,* M*/0 * C0

• F*nan1*al Re-lat*ons Vole?I $#& (A,6 : A*, Fo,1e)• A11onts


24/146


25/146

• +,o1,eent

T7e follo=*n- table 7*-7l*-7ts t7e s*-n*f*1ant 1o4onents alon- =*t7 t7e*, a*n a11ont 7easan a,eas 1,*t*1al fo, a*t*n-.

S*-n*f*1antA44,o4,*at*on A11ontsCo4onent


26/146

*.1* Si$"i8%+"t A%%ou"ti"$ Po!i%ies 9 For PF-.

T7e a*to, s7ol l*st s*-n*f*1ant a11ont*n- 4ol*1*es an 17an-es t7e,eto@ =7*17 a,e a44l*e b6t7e ent*t6 an ens,e t7at t7ese a,e *n l*ne =*t7 t7e 4ol*1*es an ,les of t7e


27/146

5. AUDIT PLANNING PHASE

,.1 I"trou%tio"

Une, t7e e8*st*n- -*an1e a9a*lable to t7e F*el A*t Off*1es (FAOs)@ all t7e FAOs a,e,e*,e to 4,e4a,e an Annal Co,4o,ate A*t +lan 1o9e,*n- a*t o4e,at*ons 4e,ta*n*n- toCe,t*f*1at*on A*t@ Co4l*an1e =*t7 At7o,*t6 A*t an ot7e, a*ts l*0e +e,fo,an1e A*t@

S4e1*al A*t@ S4e1*al St*es an A*t of Fo,e*-n A*e +,oe1ts. T7*s 17a4te, 1onta*ns-*an1e t7at t7e a*to, 1an se to 4lan t7e*, Re-la,*t6 A*t =7*17 *n1les Ce,t*f*1at*onA*t an Co4l*an1e =*t7 At7o,*t6 A*t. T7ese -*el*nes o not ,e4la1e t7e se of 4,ofess*onal -ent.

In*9*al a*ts st be 4lanne to ens,e t7at/

21


28/146

• Appropri+te +" su5%ie"t e/ie"%e is o(t+i"e to support the +uitor'sopi"io"J

• the INTOSAI Auiti"$ St+"+rs +re %op!ie 4ithJ +"

• o"!) "e%ess+r) 4or2 is perfore.

T7e 4lann*n- 47ase *n9ol9es t7e follo=*n-/

• Deteri"i"$ the o/er+!! o(Be%ti/es +" s%ope of +uitJ

• U"erst+" the e"tit)'s (usi"essJ

• Assessi"$ +teri+!it)7 p!+""e pre%isio" +" +uit ris2.

• Assessi"$ the e"tit)'s s)ste of i"ter"+! %o"tro!s.

• Deteri"i"$ the %opo"e"ts () 4hi%h the +uit 4i!! (e %o"u%te.

• Deteri"i"$ Fi"+"%i+! Auit +" op!i+"%e 4ith Authorit) Auit

o(Be%ti/es7 +" errorirre$u!+rit) %o"itio"s

• Assessi"$ I"here"t Ris2s +" o"tro! Ris2s.

•

Deteri"i"$ the +ppropri+te i@ of tests of i"ter"+! %o"tro!7 +"+!)ti%+!pro%eures +" su(st+"ti/e tests of et+i!s.

$ These steps of Planning Phase are common for both the %ertification and %ompliance with

&uthority &udits, whereas the unmarked steps relate to %ertification &udit only.

,.# The Auit Te+'s Respo"si(i!it) i" P!+""i"$ Ph+se

T7e a1t*9*t*es 4e,fo,e ,*n- t7e 4,e4a,at*on of t7e +lann*n- F*le a,e 1o4le8 an 9a,*e.Ea17 ebe, of t7e a*t tea s7ol 17e10 t7at t7e6 7a9e a -oo ne,stan*n- of t7ea1t*9*t*es t7at 7a9e been ass*-ne to t7e. Fo, eta*ls@ 4lease ,efe, to C7a4te, 3 of t7e FA


29/146

T7e 0e6 to a*nta*n*n- t7e al*t6 of t7e 4lann*n- 4,o1ess *tself *s a ,e9*e= of t7e 4lan@ =7*17t7e 1on1e,ne De4t6 A*to, Gene,al (DAG) s7ol s4e,9*se an a44,o9e (Ref/ FA


30/146

,.* Auit o(Be%ti/es +" s%ope

T7e a*t *s 1on1te to a,ess a 4a,t*1la, obe1t*9e. Ea17 a*t =*ll be es*-ne to a,essone o, o,e of t7e follo=*n- obe1t*9es/

• E84,ess*n- an o4*n*on on F*nan1*al StateentsJ

• E84,ess*n- an o4*n*on ,e-a,*n- 1o4l*an1e =*t7 1,,ent ,les an ,e-lat*onsJ

• Test*n- 1o4l*an1e =*t7 at7o,*t6 o, 1ont,ols on sele1te t,ansa1t*ons =*t7 no

o4*n*on be*n- e84,esseJ an

• E9alat*n- o4e,at*onal 4e,fo,an1e.

Note: For a comprehensive discussion of audit objectives see Section 7.1 of FAM.

T7e nat,e an s*e of t7e a*t ent*t6 ete,*nes t7e s1o4e of t7e a*t@ an *s -ene,all6 ef*ne b6 t7e a*t anate. Fo, t7e a*t of F*nan1*al Stateents@ t7at a,e ,e*,e ne, Se1t*on 3 of t7e A*to,?Gene,al O,*nan1e@ '!!$@ t7e ent*t6 to be a*te =*ll be ef*ne b6 t7e a44l*1able

a11ont*n- 4ol*1*es of t7e -o9e,nent.

,., Poi"ts for +tte"tio" +t "e@t +uit Cfro !+st )e+r

T7e 4,4ose of t7*s fo, *s to 7*-7l*-7t atte,s t7at s7ol be ta0en *nto a11ont =7en 4lann*n- t7e follo=*n- 6ea,s a*t. T7e a*to, s7ol ,e1o, e84e1te e9elo4ents *n t7eent*t6s a1t*9*t*es t7at a6 ,e*,e 17an-es *n t7e a*t 4lann*n-. T7*s fo, 1an also be se too1ent 4,a1t*1al s--est*ons fo, 17an-es to t7e ne8t 6ea,s a*t. All a*t staff a,een1o,a-e to s--est *4,o9eents *n t7e a*t 4lan an 4,o1e,es.

,.0 E"tit) %ou"i%+tio" !etter

T7e A*t o,0*n- +a4e,s 5*t *n1les t7e te4late of a lette, =7*17 nees to be *sse to t7eana-eent of t7e a*tee. It sets ot t7e te,s of t7e a*t an =*ll *n1le t7e *sses t7at t7ea*to, =ants to b,*n- to t7e attent*on of ent*t6s ana-eent. T7*s lette, =*ll 1la,*f6 =7at *se84e1te f,o a*to,s ,*n- t7e 1o,se of a*t an leas to 1oo4e,at*on bet=een bot7 t7e 4a,t*es.

,.3 Auit p!+""i"$ eor+"u

T7e a*t 4lann*n- eo,an s7ol 1o4,*se a 1on1*se an eas6 to ne,stan sa,6 of *4o,tant fa1to,s an e1*s*ons ae ,*n- t7e 4lann*n- 47ase. E47as*s s7ol be 4la1e on

17an-es t7at 7a9e been ae to t7e 4,e9*os 6ea,s 4lan. T7e a*t 4lann*n- eo,ans7ol not 4l*1ate all of t7e eta*ls set ot else=7e,e *n t7e 4lann*n- f*le@ t7e 4e,anent f*le o, *n t7e a*t 4,o-,aes.

T7e a1tal 1ontents of t7e a*t 4lann*n- eo,an =*ll e4en on s4e1*f*1 1*,1stan1es of t7e a*t. It s7ol *n1le an6 17an-es *n t7e nat,e of ent*t6s bs*ness@ st,1t,e of bs*ness@a11ont*n- 4ol*1*es o, s6stes@ *nte,nal 1ont,ols o, o4e,at*onal en9*,onent t7at =*ll affe1t t7e

24


31/146

4lanne a*t. It s7ol also e84la*n an establ*s7 an a*t st,ate-6@ t*e tables an o9e,all b-et to-et7e, =*t7 an6 s*-n*f*1ant 17an-es ae f,o t7e 4,e9*os 6ea,.

,.; Meor+"u o" post-p!+""i"$ %h+"$es

As t7e e8e1t*on@ e9alat*on an ,e4o,t*n- 47ases of t7e a*t 4,o1ee@ *t a6 be ne1essa,6 toaent7e 4lanne s1o4e of t7e a*t =o,0. T7*s a6 ,eslt f,o -a*n*n- a bette, ne,stan*n- of t7e ent*t6s a1t*9*t*es@ f,o ne84e1te e8te,nal e9elo4ents@ o, f,o ete,*n*n- a bette, eans of a17*e9*n- t7e a*t obe1t*9es as t7e a*t 4,o-,esses.

If t7e 17an-es a,e s*-n*f*1ant@ s17 as t7e one t7at 1alls fo, t7e e9elo4ent of ne= a*t 4,o-,aes o, a ,e?1ons*e,at*on of t7e so,1es of a*t ass,an1e@ t7e a*to, s7ol *s1sst7e s*tat*on =*t7 7*s27e, s4e,9*so,. T7e a*to, s7ol t7en 4,e4a,e an aen to t7e a*t 4lann*n- eo,an. T7*s aen s7ol follo= t7e sae ,e9*e= an a44,o9al 4,o1ess as*s se fo, t7e a*t 4lann*n- eo,an *tself.

,.= Iport+"t +tes

Ea17 a*t *s s17ele a,on a nbe, of *4o,tant ates. T7*s fo, l*sts ates t7at a,e l*0el6to be s*-n*f*1ant an 4,o9*es t7e a*t tea leae, =*t7 a tool to t,a10 =7en t7e =o,0 =as 4lanne an =7en *t =as a1tall6 4e,fo,e.

,.1? Tour pro$r+e

To, 4,o-,ae nees to be 4,e4a,e an a44,o9e 0ee4*n- *n 9*e= t7e t*el*nes@ ,eso,1e

1onst,a*nts an a*t st,ate-6. T7e 7ea of off*1e s7ol ens,e t7at to, 4,o-,aes a,e 4,e4a,e an a44,o9e =ell *n t*eJ an a44,o4,*ate ,e1o, *s be*n- 0e4t *n t7*s ,e-a,.

,.11 I"for+tio" reueste fro e"tit) o5%i+!s

T7e a*t tea leae, s7ol 0ee4 t,a10 of *nfo,at*on ,eeste f,o t7e a*teesana-eent@ *n1l*n- =7at *nfo,at*on =as ,eeste@ =7en *t =as ,e*,e to be el*9e,ean =7en *t =as a1tall6 ,e1e*9e. T7*s fo, 4,o9*es a s--este fo,at@ bt t7e a*t tealeae, a6 17oose to se 7*s o, 7e, o=n fo,at.

,.1# M+teri+!it) +ssesse"t for


32/146

,.1& E@pe%te +$$re$+te error +" p!+""e pre%isio"for

Ot7e, 9ales =7*17 a,e *4o,tant *n ete,*n*n- a44,o4,*ate sa4le s*e an *n e9alat*n- t7e,eslts of t7e a*t a,e e84e1te a--,e-ate e,,o, an 4lanne 4,e1*s*on. T7*s fo, 4,o9*es

eta*le *nst,1t*ons fo, a,,*9*n- at t7ese 9ales fo, t7e a*t at 7an.

,.1* Auit ris2 +ssesse"t for

It *s *4o,tant t7at t7e a*t tea establ*s7 an a44,o4,*ate le9el of ,*s0 fo, t7e a*t. T7e 1on1e4tof ,*s0 *s 9e,6 *4o,tant *n 4lann*n- s6ste?base a*ts an *s *s1sse *n eta*l *n se1t*ons 3.3an 3.# of t7e F*nan1*al A*t


33/146

ot7e, ,ele9ant obse,9at*ons ae b6 t7e *nte,nal an e8te,nal a*to,s. 7e,e9e, t7e a*to, sest7e =o,0 of t7e *nte,nal an e8te,nal a*to,s@ *t s7ol be l6 a10no=le-e *n 7*s ,e1o,.

T7e a*to, st be 7onest *n t7e assessent of *nte,nal 1ont,ols o4e,at*n- *n o9e,allen9*,onent@ -ene,al 1o4te, en9*,onent an s4e1*f*1 1o4te, base f*nan1*al a44l*1at*ons.

If t7e 1ont,ols a,e =ea0 o, non?e8*stent@ t7e a*to, s7ol *nfo, t7e ent*t6 ana-eent of t7enee to a0e *4,o9eents an s7ol also offe, s--est*ons. In t7e f*,st fe= 6ea,s of t,ans*t*onto t7e ne= a*t*n- 4a,a*-@ *t *s to be e84e1te t7at t7e 1ont,ol en9*,onent =*ll be =ea0 *nost ent*t*es. Ient*f6*n- t7e =ea0nesses =*ll be t7e sta,t*n- 4o*nt fo, e9elo4*n- st,on-e, 1ont,ols fo, t7e ft,e.

,.13 I"ter"+! %o"tro! uestio""+ire 9 $e"er+! %oputer%o"tro!s

T7*s fo, *s se to -*e t7e a*to, *n 1ons*e,*n- t7e *nte,nal 1ont,ols o4e,at*n- *n t7e ent*t6s1o4te,*se en9*,onent. Inte,nal 1ont,ols a,e *s1sse at len-t7 *n se1t*on 3. of FA


34/146

,.#? A"+!)ti%+! pro%eures +ssur+"%e for

T7e a*t tea leae, ses t7*s fo, to o1ent t7e anal6t*1al 4,o1e,e(s) t7at a,e 4lanne fo, ea17 1o4onent. T7e t64e of 4,o1e,e sele1te *s *4o,tant as *ffe,ent 4,o1e,es (*.e.1o4a,at*9e@ 4,e*1t*9e@ stat*st*1al o, o9e,all 9e,*f*1at*on 4,o1e,es) 4,o9*e a *ffe,ent le9el of ass,an1e =7en *t 1oes to 4lann*n- sbstant*9e tests of eta*ls.

Deta*le *nst,1t*ons a,e 4,o9*e =*t7 t7e fo,.

Note: & detailed discussion on analytical procedures is provided in the Financial &udit 'anual,

section (. and &ppendi* -.

,.#1 Sour%e of +uit +ssur+"%e for

In 1on1t*n- a*t@ t7e a*t tea *s loo0*n- fo, so,1es of ass,an1e t7at t7e F*nan1*alStateents 4,o9*e a t,e an fa*, 9*e=. One so,1e of ass,an1e *s a eta*le ,e9*e= of *n*9*al t,ansa1t*ons (sbstant*9e tests of eta*l). Ho=e9e,@ t7*s *s 9e,6 t*e 1ons*n-@ so t7ea*t tea loo0s fo, ot7e, so,1es of ass,an1e t7at *-7t enable t7e to ,e1e t7e aont of sbstant*9e tests of eta*l. T7e a*t ,*s0 oel 4,o9*es an a,*t7et*1 et7o of s*n- t7eassessents of *n7e,ent ,*s0@ 1ont,ol ,*s0@ anal6t*1al 4,o1e,es an o9e,all a*t ,*s0 to a,,*9e att7e le9el of ass,an1e t7at *s ,e*,e f,o sbstant*9e tests of eta*l.

T7*s fo, leas t7e a*to, t7,o-7 t7*s a,*t7et*1 oel. A eta*le *s1ss*on of t7e ,*s0 1al1lat*on *s 4,esente on t7e ,e9e,se of t7*s fo,.

,.## List of +pp!i%+(!e !+4s +" re$u!+tio"s

A ao, 1o4onent of a Re-la,*t6 A*t *s t7e 9e,*f*1at*on t7at t7e ent*t6 7as 1o4l*e =*t7a44l*1able la=s an ,e-lat*ons. T7e a*t tea s7ol enl*st all a44l*1able la=s an ,e-lat*onson t7*s fo, fo, 17e10*n- t7e ent*t6s 1o4l*an1e =*t7 la=s an ,e-lat*ons.

,.#& S+p!e se!e%tio" %he%2!ist

In 4,e4a,at*on fo, 4e,fo,*n- t7e sbstant*9e tests of eta*l@ t7e a*t tea st sele1t sa4lesof *tes to be teste. T7*s fo, *s se to ,e1o, t7e *ent*t6 of ea17 sa4le an t7e ate on=7*17 *t =as 1olle1te. CAATs s7ol be se (=7e,e a44l*1able) to sele1t an ,e1o, sa4lesta0en ,*n- a*t.

T7e follo=*n- se1t*on l*sts soe of t7e sa4l*n- te17n*es =7*17 1an be se bot7 fo, t7eCe,t*f*1at*on A*t an fo, t7e Co4l*an1e =*t7 At7o,*t6 A*t. Use of


35/146

It *s t7e sele1t*on of a sb?set of a 4o4lat*on. T7e a*to, ta0es a sa4le to ,ea17 a 1on1ls*onabot t7e 4o4lat*on as a =7ole. As s17@ *t *s *4o,tant t7at t7e sa4le be ,e4,esentat*9e of t7e 4o4lat*on f,o =7*17 *t =as sele1te.

S7/,* ,08

Sa4l*n- ,*s0 *s t7e 17an1e t7at a sa4le *s not ,e4,esentat*9e of t7e 4o4lat*on f,o =7*17 *t=as sele1te.

S++,0+,'/ 07/,*

Stat*st*1al sa4l*n- *s t7e sele1t*on of a sb?set f,o a 4o4lat*on *n s17 a =a6 t7at ea17sa4l*n- n*t 7as an eal an 0no=n 17an1e of sele1t*on.

No"-st+tisti%+! s+p!i"$

Non?stat*st*1al sa4les a,e sa4les sele1te b6 ot7e, eans =7*17 a,e *ntene to a44,o8*atet7e ,e4,esentat*9e 17a,a1te, of a stat*st*1al sa4le. Ho=e9e,@ t7e6 la10 t7e obe1t*9*t6 of astat*st*1all6 sele1te sa4le.

Note t7at t7e onl6 *ffe,en1e bet=een stat*st*1al sa4l*n- an non?stat*st*1al sa4l*n- *s t7eet7o of sele1t*n- sa4le *tes. +lann*n- ,e*,eents an t7e e9alat*on 4,o1ess ,ea*n t7esae.

Mo"et+r) U"it S+p!i"$ CMUS for su(st+"ti/e tests of et+i!s

T7e 0e6 feat,e of


36/146

1. R+"o se!e%tio"

Rano sele1t*on *n9ol9es nbe,*n- all of t7e *tes *n t7e 4o4lat*on an t7en s*n- a ,anonbe, table o, soft=a,e 4,o-,ae to sele1t '!! ,ano nbe,s. T7e a*to,@ t7en@ *ent*f*est7e sa4l*n- n*t t7at 1o,,es4ons to ea17 nbe,. T7*s et7o *s *ff*1lt to se nless t7e

sa4l*n- n*ts a,e al,ea6 4,e?nbe,e (4,e?nbe,e sales *n9o*1es@ fo, e8a4le) o, 1aneas*l6 be nbe,e

#. Fi@e i"ter/+! Cs)ste+ti% se!e%tio"

T7*s et7o *n9ol9es sele1t*n- a ,ano sta,t an t7en e9e,6 nt7 *te.

&. e!! Cr+"o i"ter/+! se!e%tio"

T7*s et7o essent*all6 1ob*nes t7e 4,e9*os t=o et7os. T7e a*to, *9*es t7e 4o4lat*on*nto 1ells an t7en 4*10s a ,ano *te f,o =*t7*n ea17 1ell.

*. Str+ti8e r+"o se!e%tio"

CAATs a6 offe, a fo,t7 et7o K st,at*f*e ,ano sa4l*n-. Us*n- t7*s a44,oa17@ t7e 4o4lat*on *s f*,st st,at*f*e base on oneta,6 ,an-es@ t64e of e84en*t,e@ et1.@ an t7en a,ano sa4le *s ,a=n f,o ea17 ,an-e. T7*s 1ol be se@ fo, e8a4le@ to =e*-7t an att,*btesa4le to t7e la,-e, olla, *tes o, s4e1*f*1 e84en*t,e t64es@ o, to ens,e t7at at least onesa4le *te *s ,a=n f,o ea17 e84en*t,e t64e.

Se!e%ti"$ the s+p!e 9 st+tisti%+! s+p!i"$

T7e stana, sa4le sele1t*on te17n*e =*t7


37/146

Fo, eta*le -*an1e 4lease ,efe, to A44en*8 B of FAi"$ for tests of i"ter"+! %o"tro!T7*s fo, 4,esents a anal a,*t7et*1 4,o1ess fo, ete,*n*n- t7e a44,o4,*ate s*e of a sa4leof t,ansa1t*ons =7*17 =*ll be sele1te to test t7e 1ont,ols *n a s4e1*f*1 a*t 1o4onent. T7e 4,o1ess *s t7e sae fo, all a*t ent*t*es@ an *s fll6 e84la*ne on t7e fo,.

T7e se of CAATs (see F*nan1*al A*t i"$ for su(st+"ti/e tests of et+i!s

T7*s fo, 4,esents a anal a,*t7et*1 4,o1ess fo, ete,*n*n- t7e a44,o4,*ate s*e of a sa4leof t,ansa1t*ons =7*17 =*ll be sele1te fo, a sbstant*9e test of eta*ls *n a s4e1*f*1 a*t1o4onent. T7e 4,o1ess *s t7e sae fo, all a*t ent*t*es@ an *s fll6 e84la*ne on t7e fo,.

T7e se of CAATs (see F*nan1*al A*t


38/146

,.#; he%2!ist of +%%ou"ti"$ esti+tes to (e re/ie4e

F*nan1*al Stateents@ es4e1*all6 t7ose 4,o1e on a11,al bas*s@ =*ll often 1onta*n a11ont*n-est*ates@ s17 as allo=an1es fo, ba an obtfl ebts an 1ont*n-ent l*ab*l*t*es. T7e a*to, s7ol *s1ss =*t7 ent*t6s ana-eent to *ent*f6 t7ese est*ate aonts an ,e1o, t7e ont7*s fo, fo, sbseent 9al*at*on =7en t7e a*t *s 4e,fo,e.

,.#= Poi"ts for +tte"tio" +t "e@t +uit

D,*n- t7e 1o,se of 4,e4a,at*on of +lann*n- an sbseent o,0*n- +a4e, f*les@ t7e a*to, a6 1oe a1,oss *tes *n t7e 1,,ent 6ea, t7at s7ol be follo=e 4 *n t7e ne8t 6ea,s a*t.T7ese a6 be a11ont*n- est*ates t7at =e,e 1ont*n-ent 4on e9ents t7at 7a9e not 6et 7a44eneo, *tes t7at a,e e84e1te to s7o= 4 *n t7e follo=*n- 6ea,s a11onts o, ot7e, atte,s s4e1*f*1 tot7e a*t at 7an.

Use t7*s fo, to ,e1o, t7ese *tes so t7at t7e6 1an be ,e9*e=e *n ne8t 6ea,s a*t 4lann*n- 47ase.

,.&? Auit p!+""i"$ %he%2!ist

T7*s fo, 4,esents a 17e10l*st of t7e ao, a1t*9*t*es t7at s7ol 7a9e been 1o4lete b6 t7ea*t tea leae, to eet 7*s ,es4ons*b*l*t6 fo, aeatel6 4lann*n- a*t an fo, o1ent*n-t7e bas*s of t7e 4lans. C7a4te, # of FA< 4,o9*es eta*l ,e-a,*n- t7e a*to,s 4lann*n-,es4ons*b*l*t6.

T7*s fo, *s also a 0e6 1o4onent of t7e DAG+s al*t6 ass,an1e 4,o1ess@ s*n1e *t 4,o9*es a9e7*1le fo, 1on*1at*n- t7e 4lann*n- 4,o1ess to t7e DAG+ ana-eent so t7e6 1an ,e9*e=an a44,o9e t7at aeate 4lann*n- =as 1o4lete *n ,es4e1t of t7e a*t.

,.&1 e"tr+!!) Le Auit

T7ese a,e a*ts =7e,e a 1ent,al tea *s ,es4ons*ble fo, t7e o9e,all 4lann*n-@ 4e,fo,an1e@e9alat*on@ ,e4o,t*n- an follo= 4. D*,e1to,ate Gene,al A*t (Defen1e Se,9*1es) 7as t7e 4,*e,es4ons*b*l*t6 to fo, a 1onsol*ate o4*n*on on t7e A44,o4,*at*on A11onts of t7e


39/146

• Dete,*n*n- t7e o4t* *8 of tests of *nte,nal 1ont,ols@ anal6t*1al 4,o1e,es an

sbstant*9e tests of eta*ls fo, ea17 1o4onent an fo, ea17 s4e1*f*1 F*nan1*al A*tobe1t*9e an ,elate Co4l*an1e =*t7 At7o,*t6 A*t obe1t*9e an e,,o, 1on*t*onJ

• +e,fo,*n- t7e o9e,all e,,o, e9alat*onJ an

• Re4o,t*n- t7e ,eslts of t7e a*t.

T7e a*to,s f,o ea17 of t7e *,e1to, off*1es a,e@ *n t,n@ ,es4ons*ble fo,/

• +,o9**n- a9*1e to ass*st t7e 1ent,al tea to 4lan t7e a*tJ

• Re9*e=*n- t7e ate,*al ,e1e*9e f,o t7e 1ent,al tea to ens,e a*t 4,o-,aes@

fo,s an 17e10l*sts ,efle1t t7e o4t* *8 of tests fo, t7at 4a,t*1la, D*,e1to,ate@ an1onta*n all t7e =o,0 ,e*,e to obta*n t7e ,e*,e aont of o9e,all ass,an1eJ

• +e,fo,*n- t7e a*t =o,0J an

• Re4o,t*n- t7e ,eslts of t7e =o,0@ *n1l*n- *n*9*al e,,o,s an ot7e, atte,s of note@ to

t7e 1ent,al tea.

33


40/146

6. AUDIT EECUTION PHASE

0.1 I"trou%tio"

T7*s 17a4te, 4,o9*es -*an1e fo, t7e a*to,s =o,0 at t7e e8e1t*on sta-e. T7*s sta-e *n1les

1o4l*an1e test*n- (test of 1ont,ols)@ sbstant*9e test*n-@ 1olle1t*n- an ,e9*e=*n- e9*en1e ana*nta*n*n- =o,0*n- 4a4e,s f*les. It nees to be note t7at t7e a*t 4,o-,aes -*9en at t7e enof t7*s 17a4te, 4,o9*e -*an1e to t7e f*el a*to,s fo, Ce,t*f*1at*on A*t an Co4l*an1e =*t7At7o,*t6 A*t. Ho=e9e,@ t7e,e a,e 9e,6 fe= a*t 4,o-,aes as 1o4*lat*on of a11onts=7*17 ,elate s4e1*f*1all6 to 1e,t*f*1at*on a*t.

O9e,all a*t e8e1t*on -*an1e *s a9a*lable *n C7a4te, of t7e FA


41/146

t7at t7e 9a,*os ste4s ,e1oene *n t7ese G*el*nes an ,es4e1t*9e fo,s 7a9e been1o4letel6 follo=e *n all ,es4e1ts.

0.& Fors +" S%heu!es for Auit E@e%utio" Ph+se

T*tles of 9a,*os fo,s s4e1*f*e *n t7e A*t o,0*n- +a4e,s 5*t a,e l*ste belo=/

• Sa,6 of Anal6t*1al Re9*e= +,o1e,es +e,fo,e

• Deta*ls of Anal6t*1al Re9*e= +,o1e,es +e,fo,e

• Co4lete Inte,nal Cont,ol ;est*onna*,es

• Inte,nal Cont,ol De9*at*ons Fo,

• Inte,nal Cont,ol De9*at*ons Sa,6

• Co4l*an1e Sa,6

• Sbstant*9e Tests of A11ont*n- Est*ates

• E,,o,s *n A11ont*n- Est*ates

• Sbstant*9e Test Sa4le Sa,6 fo, ea17 A*t +,o-,ae

• Sbstant*9e Test of H*-7 Vale25e6 Ites K Sa,6

• Deta*ls of E,,o,s *n Sa4les@ H*-7 Vale Ites an 5e6 Ites

• E8*t Inte,9*e=s

Note/ T7ese fo,s ,e1oene ne, FA< an A*t o,0*n- +a4e,s 5*t essent*all6 eet t7e,e*,eents of Ce,t*f*1at*on A*t. Ho=e9e,@ soe of t7ese fo,s@ a,0e =*t7 aste,*s0s ()@1an also be se fo, Co4l*an1e =*t7 At7o,*t6 A*t.

T7e follo=*n- 4a,a-,a47s 4,o9*e -ene,al -*an1e fo, s*n- t7e abo9e ent*one fo,s.

Inst,1t*ons fo, f*ll*n- *n t7ese fo,s a,e 1onta*ne *n t7e A*t o,0*n- +a4e,s 5*t =7*17 t7ea*to,s a,e ,e*,e to follo=.

0.* Su+r) of A"+!)ti%+! Re/ie4 Pro%eures Perfore

T7*s fo, *s se to sa,*e t7e anal6t*1al 4,o1e,es t7at =e,e 4e,fo,e. T7e a*to, s7ol note t7e 4,o1e,es t7at =e,e 4e,fo,e an 1,oss?,efe, ea17 4,o1e,e to t7e =o,0*n- 4a4e, t7at 4,o9*es t7e eta*ls of t7e test (*.e. Deta*ls of Anal6t*1al Re9*e= +,o1e,es +e,fo,efo,).

0., Det+i!s of A"+!)ti%+! Re/ie4 Pro%eures Perfore

Deta*ls of ea17 anal6t*1al ,e9*e= 4,o1e,e 1on1te b6 t7e a*t tea@ *n1l*n- t64e of test@ata se@ 1al1lat*ons 4e,fo,e@ ,eslts an a*to,s 1on1ls*on@ a,e o1ente on t7*s fo,.

0.0 op!ete I"ter"+! o"tro! uestio""+ires

T7e a*to, st test t7e 1ont,ol en9*,onent to ete,*ne =7et7e, t7e s6ste of *nte,nal1ont,ols on =7*17 t7e a*t tea *ntens to ,el6 *s a1tall6 =o,0*n- effe1t*9el6. T7*s *s one b6

35


42/146

follo=*n- t7e eta*le -*an1e 4,o9*e *n t7e Inte,nal Cont,ol ;est*onna*,es fo, *ffe,entas4e1ts of t7e a*t. T7e a*to, =*ll sele1t t7e IC;s t7at a,e to be se *n t7*s a*t an t*10 t7e off on t7e 17e10l*st 4,o9*e. T7e a*to, oes not 7a9e to a44l6 all t7e 4oss*ble IC;s *ne9e,6 a*t.

T7e 0e6 IC;s to 1ons*e, fo, Defen1e a*t a,e as follo=s/

• Proect/s %ost

• Payroll

• Pension

• +efence Provident "+01P2+0P# Fund

• !nter -ntity Transfers

• 3oods and 0ervices 2 Procurements

• %ash in 4and 2 5ank

Note: +etailed guidance for filling in the !%6/s is provided in the &udit Working Papers 7it under the section -*ecution file.

0.3 I"ter"+! o"tro! De/i+tio"s For

7*le =o,0*n- t7,o-7 t7e IC;s@ t7e a*to, s7ol *ent*f6 e9*at*ons f,o t7e 4,es1,*be*nte,nal 1ont,ols *n t7e o4e,at*ons of t7e a*te ent*t6. T7e a*to, =*ll o1ent ea17*n*9*al e9*at*on an *ts 4otent*al *4a1t on t7e ent*t6s F*nan1*al Stateents on t7*s fo,.T7e,e s7ol be one fo, fo, ea17 e9*at*on en1onte,e.

7e,e t7e o4e,at*ons of t7e a*tee o,-an*sat*on a,e e1ent,al*e@ *t *s *4o,tant to assess =7*17

=ea0nesses a,e e to s1atte,e nat,e of e4a,tent24ol*16 =ea0nesses an =7*17 a,e e to t7e*naeate a44l*1at*on of t7ese *nte,nal 1ont,ol s6stes an 4ol*1*es =*t7*n t7e e1ent,al*es*tes be*n- a*te.

0.; I"ter"+! o"tro! De/i+tio"s Su+r)

Fo, ea17 s*-n*f*1ant t64e of e9*at*on ete1te@ t7e a*to, s7ol ,e4o,t *t to t7e ent*t6sana-eent an a0e a ,e1oenat*on fo, ,e1t*f6*n- t7e 1ont,ol =ea0ness. T7e 4,4ose of t7*s fo, *s to 7el4 t7e a*to, t,a10 ea17 =ea0ness *ent*f*e b6 a44l6*n- t7e IC;@ t7e 4,oblean t7e*, ,e1oenat*on =7*17 =e,e ,e4o,te to t7e ent*t6. T7e 6ea, *n =7*17 t7e ent*t6 too0 1o,,e1t*9e a1t*on s7ol also be 1ons*e,e.

0.= op!i+"%e Su+r)

T7e a*to, =*ll se t7*s fo, to *ent*f6 t7e le-al o, ,e-lato,6 4,o9*s*ons t7at t7e ent*t6 s7ol1o4l6 =*t7@ to o1ent t7e 1ont,ol t7at *s *n 4la1e to 17e10 1o4l*an1e@ to o1ent =7et7e, t7e a*to, 1ons*e,s t7e 1ont,ol to be sat*sfa1to,6@ an =7et7e, 1o4l*an1e =as e9*ent.

36


43/146

0.1? Su(st+"ti/e Tests of A%%ou"ti"$ Esti+tes

T7*s fo, sa,*ses t7e e,,o,s *ent*f*e ,*n- t7e 4e,fo,an1e of sbstant*9e tests ona11ont*n- est*ates. T7e a*to, =*ll se *t to sa,*se e,,o,s t7at =e,e *ent*f*e *n t7eE,,o,s *n A11ont*n- Est*ates Fo, (see ne8t fo,) fo, late, se *n a--,e-at*n- t7e e,,o,s *n t7eE9alat*on an Re4o,t*n- 47ase.

0.11 Errors i" A%%ou"ti"$ Esti+tes

Fo, t7e a11ont*n- est*ates t7at =e,e *ent*f*e *n t7e +lann*n- f*le fo, 1alle C7e10l*st of a11ont*n- est*ates to be ,e9*e=e@ t7e a*to, =*ll o1ent 7*s o, 7e, ,e9*e= of t7e est*atean t7e nat,e an 9ale of an6 e,,o,s t7at =e,e *ent*f*e. T7ese e,,o,s =*ll be sa,*se *nt7e Sbstant*9e Tests of A11ont*n- Est*ates fo, as es1,*be abo9e.

0.1# Su(st+"ti/e Test S+p!e Su+r) for e+%h AuitPro$r+e

T7e a*to, st test t7e sa4le t,ansa1t*ons to *ent*f6 t7e *n1*en1e of e,,o,s *n t7e sa4le.T7*s *s one b6 follo=*n- t7e eta*le -*an1e 4,o9*e *n t7e A*t +,o-,aes fo, *ffe,entas4e1ts of Defen1e a*t -*9en at se1t*on &.$& on=a,s of t7*s 17a4te, ne, t7e 7ea*n- A*t+,o-,aes. T7e a*to,s a,e e84e1te to sele1t t7e ,ele9ant a*t 4,o-,aes fo, ea17 a*t ast7e6 o not 7a9e to a44l6 all t7e 4oss*ble A*t +,o-,aes *n e9e,6 a*t.

Sbstant*9e test*n- e8a*nes a sa4le of *n*9*al t,ansa1t*ons to ete,*ne =7et7e, t7et,ansa1t*ons sele1te 1o4l6 =*t7 all a44l*1able la=s@ ,e-lat*ons an ,les to f*n an6 e,,o,s o, anoal*es t7at a6 e8*st. Ea17 A*t +,o-,ae 4,o9*es a bas*1 set of ste4s fo, t7e a*to, tofollo= to 4e,fo, sbstant*9e tests.

T7e sbstant*9e test*n- se1t*on of t7e A*t +,o-,aes *n1les a bas*1 set of a*t obe1t*9es@=7*17 a,e es1,*be belo=/

Audit -ecti+e':

To ete,*ne =7et7e,@ on t7e bas*s of t7e t,ansa1t*ons e8a*ne (sele1t*n- a ,e4,esentat*9esa4le of t,ansa1t*ons o, ot7e, fo, of sa4le)@ t7e ent*t6s F*nan1*al Stateents 2A44,o4,*at*onA11onts 1o4l*es =*t7 t7e follo=*n- asse,t*ons2/

• Pre'entation and Di'clo'ure: t7e t,ansa1t*ons 7a9e been a44,o4,*atel6 ,e1o,e@

1lass*f*e an 4,esente.• Ei'tence and ccurrence: all t,ansa1t*ons ,ele9ant to t7e 6ea, of a11ont 7a9e been

,e1o,e an all ,e1o,e t,ansa1t*ons 7a9e o11,,e.

'Anot7e, set of asse,t*ons 1oonl6 se a,e/ E8*sten1e 2 Co4leteness 2 Valat*on 2 R*-7ts an Obl*-at*ons (o, O=ne,s7*4) 2 +,esentat*on an D*s1los,e. T7e set se *n t7ese G*el*nes *s o,e a44,o4,*ate fo, t7e a*t of t,ansa1t*ons *n t7e 4bl*1 se1to,.

37


44/146

• Co$pletene'': all t,ansa1t*ons ,ele9ant to t7e 6ea, of a11ont 7a9e been ,e1o,e an

*n1le K t7e test 7as also been e8tene to *n1le t7e 1o4leteness of =7at s7ol7a9e been *n1le not st t7e ,e1o,e t,ansa1t*ons/ *.e. all ta8es e@ not st t7ose1olle1te.

• Mea'ure$ent: t7e ,e1o,e t,ansa1t*ons 7a9e been 1o,,e1tl6 9ale@ a11,atel6

1al1late an a44,o4,*atel6 eas,e.• Regularit*: all a1t*9*t*es an f*nan1*al t,ansa1t*ons e8a*ne 1o4l6 =*t7 ,ele9ant la=s

an ,e-lat*ons (base on t7e sele1t*on of all s*-n*f*1ant a1t*9*t*es2t,ansa1t*ons an asa4le of t7e ,ea*ne,)J an on t7e bas*s of t7*s a*t =o,0 1on1le =7et7e, t7e,ele9ant la=s an ,e-lat*ons a,e be*n- 4,o4e,l6 a44l*e.

T7e 0e6 A*t +,o-,aes fo, t7*s 4,4ose a,e -*9en ne, se1t*on &.$&.

0.1& Su(st+"ti/e Test of Hi$h


45/146

0.10 Auit Pro$r+es

T7e ,ea*n*n- 4a,t of t7*s se1t*on 1onta*ns t7e follo=*n- eta*le a*t 4,o-,aes fo, 9a,*osa*t a,eas/

• Proect/s %ost

•

Payroll • Pension

• +efence Provident "+01P2+0P# Fund

• !nter -ntity Transfers

• 3oods and 0ervices 2 Procurements

• Works "'ilitary -ngineering 0ervices#

• %ash in 4and 2 5ank

• %ontracts

• 8and 9 5uilding "'ilitary -state 1ffice#

• Pakistan &rmy nits 2 Formations

• Pakistan &ir Force nits 2 Formations• Pakistan Navy nits 2 Formations

T7e A*t +,o-,aes -*9en *n t7*s se1t*on 1annot 4,o9*e an e87ast*9e set of 17e10s.Alt7o-7 *n 1e,ta*n 1ases s4e1*f*1 ,efe,en1es to t7e 1,,ent ,les an ,e-lat*ons 7a9e been -*9en*n t7e a*t 4,o-,aes@ *t nees to be note t7at t7e a*to, s7ol be fa*l*a, =*t7 t7eo4e,at*ons of t7e a*t ent*t6 an s7ol 7a9e a son 0no=le-e of t7e ,ele9ant la=s@,e-lat*ons an ,les =*t7 =7*17 t7e t,ansa1t*ons st 1o4l6. T7*s =*ll allo= 7*27e, to a0ea44,o4,*ate astents to t7e a*t 4,o-,ae -*es. F,t7e,o,e@ *f t7e a*t 4,o-,aes onot 1o9e, t7e a*to,s ,e*,eents@ 7e 1an a an a*t =o,0 s7eet on =7*17 7e notes t7eeta*ls of t,ansa1t*on(s) (,e9ene2e84ense 2*n9estent et1)@ 7*s a*t 4,o1e,e(s) an f*n*n-s.

T7e a*t 4,o-,aes 7a9e been e9elo4e b6 0ee4*n- *n 9*e= t7e ,*s0s ent*one *n %.".

39


46/146

0.13 Auit Pro$r+e ProBe%t osts

Audit Entit*: Audit Period:

Date"'# Conducted

Audit Procedure Done

/*

P

Re!.

Existence and Occurrence

• Fo, a sa4le of 4,oe1ts an2o, 4,oe1t e84en*t,e t,ansa1t*ons@ 17e10

=7et7e, 4a6ents of b*lls2*n9o*1es a,e 4,o4tl6 an 1o,,e1tl6 ente,e*nto a11ont*n- ,e1o,s

• T,a1e ea17 4a6ent 2 e4os*t to ,ele9ant ban0 a11ont an 17e10 t7at

,e1*4*ent of 4a6ent =as t7e 4a,t6 =7o 1a,,*e ot t7e =o,0 an b*llea-a*nst t7e 4,oe1t

• Fo, a sa4le of e84en*t,e ,e1o,s *n t7e Const,1t*on A11ont an2o,

4,oe1t a11onts@ 17e10 t7at t7ese =e,e 1o,,e1tl6 17a,-e to t7e 4,oe1t(an =e,e 1ons*stent =*t7 t7e te,s of t7e 1ont,a1t)

Competeness

• Fo, a sa4le of 4,oe1ts@ ,e1on1*le t7e total 4a6ents@ ,*n- t7e 6ea,

of a*t@ (as ete,*ne b6 *ns4e1t*on of 9o17e,s o, f,o 4,oe1ta11onts) =*t7 t7e aont ,e1o,e *n t7e Gene,al Le-e,.

•Fo, a sa4le of 4,oe1ts@ ,e1on1*le t7e total 4a6ents of f*nal b*ll =*t7Cont,a1t A-,eeent@ S17eles@


47/146

Const,1t*on A11ont@ S17eles@


48/146

Protection Act 1334#

• Con1le =7et7e, t7e en9*,onental assessent =as t*el6 (*.e.

1o4lete befo,e an6 s*-n*f*1ant effo,t o, 1o*tents ae on t7e 4,oe1t K an * not 1ont,*bte to an6 se,*os ela6s alt7o-7 t7ea*to, s7ol be 1a,efl to ,e1o-n*se 1o4le8*t*es s,,on*n- t7*s

,e*,eentP)J an aeate ? -ent on aea16 *-7t ,e*,ee84e,t o4*n*on to -*e t7e a*to,

• Note =7et7e, a1t*ons on t7e 4,oe1t 1o4l*e =*t7 t7e 1on1ls*ons an

,e1oenat*ons of t7e en9*,onental assessent

%ecisions to proceed based on appropriate and ade)uate information

• Fo, t7ose 4,oe1ts *n t7e sa4le sele1te@ 17e10 =7et7e, e1*s*ons

,elat*n- to t7e 4,oe1t =e,e ae =*t7 s44o,t*n- anal6s*s an*nfo,at*on a9a*lable (s17 as/ ,el*able est*ates of 1ostJ ,e*,eentss4e1*f*eJ an ,*s0s *ent*f*e an assesse)

• 7e,e 4oss*ble@ 1on1le on t7e aea16 of t7e anal6s*s to o t7*s

a6 ,e*,e e84e,t o4*n*on to -*e t7e a*to,P

• T7e a*to, s7ol note =7e,e t7e e1*s*on on t7e 4,oe1t *s *n1ons*stent=*t7 t7e a9a*lable anal6s*s

Contin"enc# pans deveoped for major ris' situations& *herever

feasibe

• T7e a*to, s7ol en*,e =7et7e, t7e,e a,e an6 4ol*1*es o, *,e1t*9es

,e-a,*n- 1ont*n-en16 4lann*n- fo, s4e1*f*1 7*-7 ,*s0 s*tat*ons(4oss*ble labo, *s4tes@ a9a*lab*l*t621ost of 4a,t*1la, te17nolo-*es@en9*,onental 1onst,a*nts@ lo1al s44o,t fo, t7e 4,oe1t)

• Fo, t7ose 4,oe1ts *n t7e sa4le sele1te@ 17e10 =7et7e, t7e,e a,e

s*tat*ons =7e,e a 1ont*n-en16 4lan =ol be a44,o4,*ate (o, ,e*,ene, 4ol*16)

• 7e,e *n t7e o4*n*on of t7e a*to,@ a 1ont*n-en16 4lan =ol be

a44,o4,*ate@ ete,*ne =7et7e, one =as 4,o1e an assess *tsa44,o4,*ateness fo, t7e ,*s0s 2 ,e*,eents *ent*f*e

• L*0e R*s0 : Cost@ Co,t De1*s*on on l*t*-ate atte,s@ Se1,*t6

De4os*ts@ L**ate Daa-es

$roper contractin" procedures and practices foo*ed

See A*t G*e on Cont,a1t*n-

A prere)uisites met before commitments made + or contracts entered

into• Fo, a sa4le of 4,oe1ts@ 17e10 =7et7e, t7e a44,o4,*ate a1t*9*t*es 7a9e

been s11essfll6 1o4lete befo,e ente,*n- t7e ne8t sta-e of t7e 4,oe1t

• In 4a,t*1la,@ ens,e t7at 1o*tents to 4,o1ee 7a9e not been ae

nt*l all sbstant*al ,e*,eents 7a9e been 1o4lete at t7e 4,e9*ossta-e

• S4e1*f*1all6@ no 1ont,a1ts o, ot7e, =,*tten o, 9e,bal ne,ta0*n-s 7a9e

42


49/146

been ae befo,e t7e on*es 7a9e been allo1ate to t7e ne8t sta-e of t7e 4,oe1t an all 4,e,e*s*tes 7a9e been et

$a#ments not made unti a a"reed,upon )uait# and )uantit# of

materias& construction& etc. are met

•Fo, t7ose 4,oe1ts *n t7e sa4le@ 17e10 =7et7e, t7e,e *s o1entat*onon f*le to eonst,ate t7at all ,e*,eents =e,e et@ an a44,o9alsobta*ne@ befo,e 4a6ents =e,e ae

• In 4a,t*1la,@ loo0 fo, e9*en1e ,elat*n- to (=7e,e a44,o4,*ate)/ 4,o4e,

*ns4e1t*on 1a,,*e ot@ 17e10*n- t7at t7e fll aont of ate,*alss44l*e@ e8*sten1e of al*t6 1ont,ol o9e, 4,o1ts an se,9*1es,e1e*9eJ 4,o4e, s*-n?off 4,o1e,es follo=eJ et1.

• 7e,e t7e te,s an 1on*t*ons of t7e 1ont,a1t =e,e not et@ 17e10

=7et7e, t7e ne1essa,6 a44,o9als@ an 1o,,es4on*n- 1ont,a1taenents@ =e,e obta*ne to e*t7e,/

a) =a*9e one o, o,e of t7ese s4e1*f*1at*ons 2 ,e*,eents@ an2o,

b) 17an-e t7e aont of 4a6ent 4,*o, to 4a6ent

• Ens,e f*nal 4a6ents ae on %!t7 >ne@ bt e*t7e, =o,0 =as not

a1tall6 1o4lete o, -oos =e,e not el*9e,e 2 ,e1e*9e

Appropriate monitorin" and reportin" of pro"ress

• T7e a*to, s7ol en*,e =7at 4ol*1*es@ *,e1t*9es an 4,o1e,es

e8*st =*t7 ,e-a, to t7e on*to,*n- an ,e4o,t*n- of 4,oe1ts(4a,t*1la,l6 la,-e an2o, 1o4le8 4,oe1ts)

• Dete,*ne =7et7e, t7e,e a,e ,e-la, 4,oe1t ,e4o,ts 1onta*n*n-

*nfo,at*on on/a) t7e 4,o-,ess of t7e 4,oe1tJ b) e84en*t,es a-a*nst b-etJ1) fo,e1ast of total 1o4let*on 1ost an 1o4let*on ateJ) 4,oe1t *ff*1lt*es an2o, ela6sJe) 4,o4ose 1o,,e1t*9e a1t*onsJf) Cont*n-en16 4lansQ

fo, ea17 of t7e 4,oe1ts *n t7e sa4le of 4,oe1ts

• Assess t7e al*t6 of *nfo,at*on 1onta*ne *n t7ese ,e4o,ts an

1on1le =7et7e, t7e ent*t6 1on1ts a44,o4,*ate on*to,*n- an,e4o,t*n- of 4,o-,ess

Corrective actions ta'en in a time# and effective manner • If an6 of t7e 4,oe1ts *n t7e sa4le en1onte,e 4,obles o, setba10s@

e8a*ne =7at *sses 7a to be ,esol9e

• Con1t an anal6s*s of =7at 1o,,e1t*9e a1t*ons 7a been *ent*f*e as

ne1essa,6

• Do1ent =7at a1t*ons =e,e ta0en an 1on1le =7et7e,/

a) t7ese =e,e ta0en *n a t*el6 anne, b) at a ,easonable a*t*onal 1ost (1o4a,e to a1t*on 4lan *f

43


50/146

a9a*lable)@ an1) *4a1te on t7e s11ess of t7e 4,oe1t

"De+iation rder', Pro+i'ional 5u$p Su$#

-estin" conducted to ensure a components are in operationa condition

•Fo, t7ose 4,oe1ts *n t7e sa4le t7at 7a9e been 1o4lete@ 17e10 =7ata1t*ons =e,e ta0en to ass,e t7at t7e fa1*l*t6 2 e*4ent 2 1o4te, s6ste 2 o, ot7e, ot4t et t7e o,*-*nal (o, aene) ,e*,eents

• as a 1o*ss*on*n- ,e4o,t (o, ,e4o,t on sat*sfa1to,6 1o4let*on of t7e

4,oe1t) 4,o1e

• D* t7*s ,e4o,t@ o, ot7e, 1on*1at*ons *n*1ate e8a4les of

ef*1*en1*es (o, nsat*sfa1to,6 4e,fo,an1e)

An# faiures to meet operationa specifications corrected in a time#

manner

• *t7 ,e-a, to an6 ef*1*en1*es *ent*f*e abo9e@ =7at a1t*ons =e,e

ta0en *n ,es4onse to t7ese ef*1*en1*es (s17 as 7ol ba10 of f*nal 4a6ent)

• Dete,*ne =7et7e, t7ese 1o,,e1t*9e a1t*ons =e,e ta0en *n a t*el6

anne, an f,t7e,o,e@ =7et7e, t7ese 4,obles =e,e e9entall6,esol9e

• T7,o-7 *nte,9*e=s@ 476s*1al *ns4e1t*on an ,e9*e= of o1ents@

1on1le =7et7e, t7e fa1*l*t6 2 e*4ent 2 o, =7ate9e, =as sat*sfa1to,6o, =7et7e, t7e,e =as e9*en1e of *n1o4lete 2 nsat*sfa1to,6 4,o1t(s)an =o,0ans7*4

44


51/146

0.1; Auit Pro$r+e Ep!o)ee Re!+te E@pe"se


Date"'# Conducted:


/*:

P

Re!.


• Sele1t a sa4le of t,ansa1t*ons (as ,e*,e fo, 1e,t*f*1at*on

,e*,eents 2 fo, 4,4oses of test*n- 1ont,ols 2 fo, a*t*onalsbstant*9e 1o4l*an1e test*n-)

• Refe, to t7e +a6,oll Re-*ste, fo, all e4lo6ees *n t7e sa4le

• F,o t7e sa4le of t,ansa1t*ons 17e10 t7at/ e4lo6ee *s *ent*f*e *n

+a6,oll Re-*ste,J an t7at t7at 4a6ent =as ae to 1o,,e1t 4a6ee

• C7e10 attenan1e ,e1o,s to ete,*ne t7at e4lo6ees *n sa4le

ea,ne t7e aont e *n 4a6 (t7*s *s a test of attenan1e@ not of effo,t)

• D*,e1t e4os*t K =e nee 1onf*,at*on f,o ban0 of e4lo6ee *n

sa4le ,e-a,*n- aonts e4os*te an *ent*t6 of *n*9*al =7o

7ols a11ont• Be 4,esent on one o, o,e o11as*ons =7en 1as7 *s *st,*bte to

e4lo6ees belo= le9el " an 17e10 t7at t7ose ,e1e*9*n- one6 a,e bone?f*e e4lo6ees an t7at t7e total one6 *st,*bte *n a--,e-atetotals t7e aont of 1as7 at7o,*e b6 t7e DDO

Competeness

• Co4a,e l*st of e4lo6ees 4a* a-a*nst Establ*s7ent Re-*ste, fo,

sele1te ont7s

• Sele1t a sa4le of e4lo6ees =7o ,e1entl6 ,et*,e 2 t,ansfe,,e ot 2

ot7e,=*se left t7e off*1e an 17e10 =7et7e, an6 ,e1e*9e 4a6ents

afte, ate of lea9*n- (ast*n- fo, t**n- of last 4a6ent)• Sele1t a sa4le of e4lo6ees ,e1entl6 o*n*n- t7e off*1e an 1onf*,

t7at t7e6 =e,e not 4a* befo,e t7e6 1oen1e

• Con1t a ,e1on1*l*at*on (an2o, 17e10 a bat17 of t,ansa1t*ons)

bet=een D*,e1t C,e*t A9*1e 2 +a6,oll A9*1e 2 DDO ont7l6stateent%P an


52/146

Gene,al Le-e,

• Ta0e a sa4le of e4lo6ees (f,o establ*s7ent l*st*n- 2 tele47one

l*st 2 o, ot7e, so,1e) an 17e10 t7at t7e6 7a9e ,e1e*9e 4a6ent otof t7e 4a6,oll s6ste

Measurement • Fo, t7e sa4le of t,ansa1t*ons 17e10/

• T7at 4a6ent ,e1e*9e b6 e4lo6ee *s 1o,,e1t a11o,*n- to

+a6,oll Re-*ste,J

• T7at t7e +a6,oll Re-*ste, *s 1ons*stent =*t7 ,ele9ant Rles

a44l6*n- to 4,oot*on@ 4a6 ,ates an ent*tleentsJ

• T7ose e1t*ons a,e 1o,,e1t (a11o,*n- to t7e D+ Fn 2 t7e

*n1oe Ta8 O,*nan1e@ $3 an as o*f*e f,o t*e to t*e 2ot7e, e1t*ons *n a11o,an1e =*t7 ,les an ,e-lat*ons-o9e,n*n- e1t*ons s17 as ,ent e1t*ons@ loans ana9an1es 2 et1.)

• C7e10 fo, t7e sele1te sa4le of e4lo6ees ,e1entl6 o*n*n- t7e off*1e

t7at t7e aont of t7e f*,st 4a6ent =as 1o,,e1t a11o,*n- to t7e sta,tate an a11o,*n- to t7e*, +a6,oll Re-*ste,

• C7e10 fo, t7e sele1te sa4le of e4lo6ees =7o ,e1entl6 left t7e

off*1e t7at t7e aont of t7e last 4a6ent =as 1o,,e1t a11o,*n- to t7eate of last a6 of e4lo6ent *n se1t*on an a11o,*n- to t7e*, +a6,oll Re-*ste, K 1o4a,e 4a6?sl*4s =*t7 Last +a6?sl*4 Ce,t*f*1ate*sse

• C7e10 fo, a sa4le of ont7s t7at 4a6,oll 4a6ents a,e 1ons*stent

=*t7 a1tal a*ss*b*l*t6 ,e1o,e b6 t7e DDOs

!e"uator#

• C7e10 t7at all o1ents ,elat*n- to t7e sa4le of

t,ansa1t*ons2e4lo6ees a,e 1o4lete fll6@ 7a9e 4,o4e, at7o,*at*on(*n1l*n- 17e10*n- s*-n*n- at7o,*t6 an s*-nat,es of t7e a44,o9*n-off*1e,s)

• An6 ,les ,e-a,*n- ,e1e*4t of *n1,eents *n 4a6 s7ol be 17e10e

(*n1l*n- fo, e8a4le *s1*4l*na,6 a1t*ons 2 sat*sfa1to,6 4e,fo,an1e 2 al*f*1at*ons o, 1e,t*f*1at*ons ,e*,e to a9an1e be6on ba,,*e,s 2 et1)

• C7e10 t7at t7e total nbe, of e4lo6ees (b6 *n*9*al n*ts)

,e1e*9*n- 4a6 oes not e81ee st*4late establ*s7ent l**ts

$resentation and %iscosure

• C7e10 t7at 4a6,oll 4a6ents a,e 1o,,e1tl6 *ent*f*e *n t7e Gene,al

Le-e, ne, +a6,oll Obe1t an 1o,,e1tl6 1oe a11o,*n- to t7eC7a,t of A11onts b6 17e10*n- fo, t7e sa4le of t,ansa1t*ons t7at t7enet 4a6 an e1t*ons 7a9e been 1o,,e1tl6 1oe a11o,*n- to t7eC7a,t of A11onts 1oes.

46


53/146

• C7e10 =7et7e, t7e 4a6,oll se1t*on ,e1e*9es t*el6 ,e4o,ts f,o t7e

Gene,al Le-e, ne, t7e ,ele9ant Obe1t Coes an t7at t7e*nfo,at*on *s 4,esente *n a =a6 t7at *t 1an be se b6 t7e 4a6,ollse1t*on.

• Fo, a sa4le of ont7s@ 17e10 t7at t7e total 4a6 (-,oss@ net an

e1t*ons) a,e 1o,,e1tl6 4,esente *n t7e Gene,al Le-e, b6 a0*n-t7e ne1essa,6 1al1lat*ons (=7*17 =*ll be 17 eas*e, t7,o-7 t7e seof CAATs).

Additiona Chec's

• C7e10 t7at t7e ,e1o9e,6 of lea9e sala,6 an 4ens*on 1ont,*bt*on of

e4lo6ees on e4tat*on to Fo,e*-n Se,9*1e (ot7e, e4a,tents 2ent*t*es) 7as been 4,o4e,l6 1olle1te.

• C7e10 t7at t7e nbe, of e4lo6ees *n ea17 1ate-o,6 falls =*t7*n t7e

at7o,*e st,en-t7 o, san1t*on of t7e 1o4etent at7o,*t6 e8*sts fo, a*t*onal staff.

• C7e10 t7at 4a6ents fo, 1onse,9an16 an 7ot =eat7e, establ*s7enta,e 1o,,e1tl6 ae an t7at t7e at7o,*e allotents of fns an t7est,en-t7 of n*ts2fo,at*ons a,e not e81eee.

47


54/146

0.1= Auit Pro$r+e Pe"sio"


Date"'# Conducted:


/*:

P

Re!.


• Sele1t a sa4le of t,ansa1t*ons fo, t7e 4,4ose of test*n- 1ont,ols 2 fo,

a*t*onal sbstant*9e 1o4l*an1e test*n-

• Refe, to t7e +ens*on Re-*ste, fo, all 4ens*one,s *n t7e sa4le

• F,o t7e sa4le of t,ansa1t*ons 17e10 t7at/ 4ens*one, *s *ent*f*e *n

+ens*on Re-*ste,J an t7at t7at 4a6ent =as ae to 1o,,e1t ,e1*4*ent

• T7,o-7 a44l*1at*on of CAATs o, ot7e,=*se@ sea,17 fo, an6 4a6ents to

4ens*one,s t7at loo0 as *f t7e6 *-7t be oble 4a6ents to t7e sae 4e,son K e.-. t7ose 4ens*on ,e1*4*ents =7o 7a9e t7e sae 7oe a,ess

• T7,o-7 a44l*1at*on of CAATs o, ot7e,=*se@ sea,17 fo, an6 4a6ents ae

to an a,ess ot7e, t7an t7at of t7e 4ens*one, K e.-. 17e10 *f t7e =,on- 4e,son *s ,e1e*9*n- t7e 4ens*on 4a6ent

• 7e,e *t *s ss4e1te t7at t7e,e 1ol be 4l*1ate 4a6ents@ *t *-7t be

48


55/146

4oss*ble fo, t7e a*to, to a,,an-e t7ese 4ens*one,s to 4*10 4 t7e*, 17eesat t7e off*1e of t7e DDO@ =*t7 t7e 4e,*ss*on of DDO.

• Co4a,e l*st of 4ens*one,s 4a* a-a*nst +ens*on Re-*ste, fo, sele1te

ont7s.

• Fo, t7e sa4le sele1te@ 17e10 4ens*one,s *n t7e +ens*on Re-*ste, a-a*nst

Establ*s7ent Re-*ste, an 1onf*, t7at 4e,t*nent *nfo,at*on a,e 1ons*stent(nae@ ate of b*,t7@ le9el@ ate of ,et*,eent2 sta,t of 4ens*on 4a6ents@et1.)

• Sele1t a sa4le of 4ens*one,s =7o ,e1entl6 ,et*,e an 17e10 =7et7e, t7e6

,e1e*9e 1o,,e1t 4ens*on 4a6ents.

Measurement

• Con1t a ,e1on1*l*at*on bet=een (D*,e1t C,e*t A9*1e 2 +ens*on 17ee)

an


56/146

• t7e 4e,*o of se,9*1e allo=e to 1ont to=a,s 4ens*on *s al*f6*n-

an t7e ,ate of 4ens*on 7as been 1al1late *n te,s of t7e 4e,*o of al*f6*n- se,9*1eJ

• =7e,e 4ens*on of a 4a,t*1la, ,an0 *s e4enent on a *n* 4e,*o

of se,9*1e at t7at ,an0@ t7e ,e*,e se,9*1e 7as been ,ene,eJ

• t7e s7a,e of 4ens*on 1ont,*bt*on *s 17a,-e to ot7e, e4a,tents=7e,e t7e off*1e, 7as ,ene,e se,9*1eJ

• t7e,e a,e 1ont,ols to ens,e ,e1o9e,6 of lea9e sala,6 an 4ens*on

1ont,*bt*ons of e4lo6ees on e4tat*on to fo,e*-n se,9*1e (oes t7es4e,9*so, 1on1t 17e10s of se,9*1e stateents to ens,e s17,e1o9e,*esQ)J

• t7e total 4ens*on san1t*on *s =*t7*n t7e 4,es1,*be a8* l**t

• In 1ase of a 4ens*on as *n9al*@ 17e10 t7at/

• 1e,t*f*1ate of *n9al*at*on *s f,n*s7e b6 t7e 4,o4e, at7o,*t6J

• 4e,*o bet=een t7e *sse of t7e *n9al* 1e,t*f*1ate an t7e ate of

*s17a,-e oes not e81ee %! a6s• In 1ase of *sab*l*t6 4ens*on@ 17e10 t7at/

• *sab*l*t6 7as been 1e,t*f*e b6 4,o4e, e*1al at7o,*t6 as att,*btable

to@ o, a--,a9ate b6@ *l*ta,6 se,9*1eJ

• *n 1ase of *n,*es e to a11*ents@ 4,o1ee*n-s of t7e 1o,t of

*n*,6 as to ,e-a,s to att,*btab*l*t6 *s atta17e =*t7 t7e 1la*J

• ,ate of 4ens*on *s 1o,,e1tl6 a44l*e =*t7 ,efe,en1e to t7e 1lass of

*sab*l*t6 e1*e b6 t7e e*1al at7o,*t*esJ

• 4ens*on *s not 1ont*ne be6on t7e o,*-*nal ate of te,*nat*on

=*t7ot e8a*nat*on of t7e 4ens*one, b6 a e*1al boa,

• In 1ase of fa*l6 4ens*on@ 17e10 t7at/

• t7e benef*1*a,6 *s =*t7*n t7e 4,es1,*be oa*n of ,elat*ons7*4 =*t7 t7e

e1ease e4lo6ee =7ose 1ase of eat7 7as been e1la,e b6 ae*1al at7o,*t6 to be *,e1tl6 att,*btable to *l*ta,6 se,9*1eJ

• s4e1*al fa*l6 4ens*on *s not 1ont*ne be6on se1on l*feJ

• 1la*ants 4,*9ate *n1oe 7as not e81eee t7e eans l**t

4,es1,*be *n -,ant of t7e fa*l6 1aseJ

• total of s4e1*al fa*l6 4ens*on2 e4enents 4ls 17*l,ens allo=an1e@

oes not e81ee 4a6

• In 1ase of 1otat*on of 4ens*on@ 17e10 t7at/

• t7e aont of 1otat*on oes not e81ee t7e a8* l**t an

,es*al 4ens*on *s not less t7an t7e a8* f*8eJ• 4a6ent of 1ote 4o,t*on of 4ens*on eases on t7e ates la*

o=n *n t7e 4ens*on ,e-lat*onsJ

• t7e 1ote 9ale 7as been 1o,,e1tl6 1al1late a11o,*n- to t7e

tables a44l*1able to ea17 1ase

• C7e10 t7at all o1ents ,elat*n- to t7e sa4le of t,ansa1t*ons ,e-a,*n-

4ens*on 4a6ents a,e 1o4lete fll6@ 7a9e 4,o4e, at7o,*at*on (*n1l*n-

50


57/146

17e10*n- s*-n*n- at7o,*t6 an s*-nat,es of t7e a44,o9*n- off*1e,s)

• C7e10 t7at t7ese 1al1lat*ons 1o4l6 =*t7 t7e ,e-lat*ons ,elat*n- to

4ens*ons.

• C7e10 t7at 4ens*on 4a6ents a,e 1o,,e1tl6 *ent*f*e *n t7e Gene,al Le-e,

ne, +ens*on Obe1t an 1o,,e1tl6 1oe a11o,*n- to t7e C7a,t of

A11onts b6 17e10*n- fo, t7e sa4le of t,ansa1t*ons t7at t7e 4ens*on 4a6ents 7a9e been 1o,,e1tl6 1oe a11o,*n- to t7e C7a,t of A11onts1oes.

• C7e10 =7et7e, t7e 4ens*on se1t*on ,e1e*9es t*el6 ,e4o,ts f,o t7e Gene,al

Le-e, ne, t7e ,ele9ant Obe1t Coes an t7at t7e *nfo,at*on *s 4,esente *n a =a6 t7at *t 1an be se b6 t7e 4ens*on se1t*on.

0.#? Auit Pro$r+e Defe"%e Pro/ie"t Fu"


Date"'# Conducted:


/*:

P

Re!.

• Co$pletene''

• Sele1t a sa4le of t,ansa1t*ons (as ,e*,e fo, 1e,t*f*1at*on

,e*,eents 2 fo, 4,4oses of test*n- 1ont,ols 2 fo, a*t*onalsbstant*9e 1o4l*an1e test*n-)

• F,o t7e sa4le of t,ansa1t*ons 4,o9**n- a9an1es 2 f*nal

4a6ents@ 17e10 t7at t7ese 7a9e been 1o,,e1tl6 4ate *n t7e DS+Fn ,e-*ste,J an t7at fo, ea17 t,ansa1t*on/

• t7e 4a6entJ

• t7e astent to fn balan1eJ an

51


58/146

• e1t*ons f,o 4a6,oll fo, ,e4a6ent of a9an1eJ

=as to t7e sae sbs1,*be,

• C7e10 fo, t7e sa4le t7at t7e DS+ Fn le-e, 7as been 4ate

to ,efle1t t7e ont7l6 e1t*ons f,o sala,6

• T7,o-7 a44l*1at*on of CAATs o, ot7e,=*se@ sea,17 fo, an6

4a6ents (a9an1es 2 f*nal 4a6ents) to sbs1,*be,s t7at loo0 as *f t7e6 *-7t be oble 4a6ents to t7e sae 4e,son

• T7,o-7 a44l*1at*on of CAATs o, ot7e,=*se@ sea,17 fo, an6

4a6ents ae to a ban0 a11ont *ffe,ent f,o t7e one se fo, sala,6 4a6ents K e.-. 17e10 *f t7e =,on- 4e,son *s ,e1e*9*n- t7ea9an1e 2 f*nal 4a6ent

• Co4a,e l*st of a9an1e 4a6ents 4a* ot of DS+ Fn fo, sele1te

ont7s =*t7 l*st of sbs1,*be,s an 17e10 =7et7e, t7e 17an-es to t7e 4a6,oll e1t*ons ,efle1t t7e ne1essa,6 17an-es to 4a6 ba10 t7ea9an1e

Measurement

• C7e10 t7at t7e f*nal 4a6ent ot of t7e DS+ Fn 1o,,es4ons =*t7

t7e f*nal 4a6,oll 4a6ent an *n*t*at*on of 4ens*on 4a6ents (=7e,ea44l*1able) K *n ot7e, =o,s@ fo, t7e sa4le sele1te@ 17e10 t7at ata,elat*n- to t7e f*nal 4a6ent 1o,,es4ons =*t7 4ens*one,s *n t7e+ens*on Re-*ste, a-a*nst Establ*s7ent Re-*ste, an 1onf*, t7at 4e,t*nent *nfo,at*on a,e 1ons*stent (nae@ ate of b*,t7@ le9el@ ate of lea9*n-2,et*,eent 2 sta,t of 4ens*on 4a6ents@ et1.)

• Con1t a ,e1on1*l*at*on bet=een D*,e1t C,e*t A9*1e an


59/146

ele-ate off*1e,s.

• At t7e sae t*e@ 17e10 t7at t7ese 1al1lat*ons 1o4l6 =*t7 t7e

,e-lat*ons an ,les ,elat*n- to t7e DS+ Fn (*n1l*n- a9an1e *sless t7an #! of balan1e *n sbs1,*be,s a11ont 2 a non?,efnablea9an1e *s ostl6 4,o9*e to soeone =7os a-e *s abo9e t7e

t7,es7ol.• C7e10 t7at a9an1e 2 f*nal 4a6ents a,e 1o,,e1tl6 *ent*f*e *n

t7e Gene,al Le-e, ne, DS+ Fn Obe1t an 1o,,e1tl6 1oea11o,*n- to t7e C7a,t of A11onts b6 17e10*n- fo, t7e sa4le of t,ansa1t*ons t7at t7e a9an1e 2 f*nal 4a6ents 7a9e been 1o,,e1tl61oe a11o,*n- to t7e C7a,t of A11onts 1oes.

• C7e10 =7et7e, t7e DS+ Fn se1t*on ,e1e*9es t*el6 ,e4o,ts

f,o t7e Gene,al Le-e, ne, t7e ,ele9ant Obe1t Coes an t7at t7e*nfo,at*on *s 4,esente *n a =a6 t7at *t 1an be se b6 t7e se1t*on.

0.#1 Auit Pro$r+e I"ter-E"tit) Tr+"sfers


Date"'# Conducted:

Audit Procedure Done/*.

P

Re!.

Co$pletene''

• Obta*n f,o t7e ent*t6 a s17ele of *nte,?ent*t62-o9e,nent a11onts

s7o=*n- se4a,atel6 fo, t7e 1,,ent an 4,e9*os 6ea,/

• Re1e*9able f,o24a6able to ot7e, e4a,tent2 se1t*on =*t7*n t7e ent*t6

• Re1e*9able f,o24a6able to ot7e, -o9e,nent ent*t*es2

e4a,tents2self a11ont*n- ent*t*es2e8e4t ent*t*es.

• Obta*n Annal ,e1on1*l*at*ons of *nte,?ent*t62-o9e,nent

t,ansa1t*ons2e817an-e an settleent a11onts bet=een Cont,olle, Gene,alA11onts 2


60/146

A11onts2Cont,olle, Na9al A11onts2Cont,olle, of A11onts A*, Fo,1e@ to*n9est*-ate2anal6e nsal ,e1on1*l*n- *tes an *ffe,en1es fo, follo=*n-a,eas.

• T,ansfe, bet=een Off*1es (TBO)@ T,ansfe, Ent,*es (TE) otl*ne *n

17a4te, &@ $!@ $$ an $' of


61/146

• Ens,e t7at all fns =*t7,a=n f,o one -,ant o, a44,o4,*at*on fo, ,e?

a44,o4,*at*on to anot7e, -,ant o, a44,o4,*at*on 7as ,e1e*9e t7e a44,o9al of t7e le-*slat,e

• C7e10 t7at *nte,?ent*t6 a11ont balan1es =*t7*n t7e sae -o9e,nent 7a9e

been ,e1o-n*e *n t7e a11onts of t7e *n*9*al ent*t6 bt 1an1elle ot on

1onsol*at*on• C7e10 t7at t7e balan1es 7a9e not been ,e1o-n*e *n t7e Consol*ate


62/146


63/146

f,o DDO o, *ne4enent 4a,t6)

• Re9*e= ss4ense a11ont fo, n1lea, 4a6ents o, fo, *na44,o4,*ate 1lea,an1es

• C7e10 t7at all -oos an se,9*1es ,e1o,e as a1*,e *n t7e 6ea, a,e 17a,-e

a-a*nst t7at 6ea, (*f 4,a1t*1al o, se of CAAT a9a*lable)

• Fo, t7e sa4le of t,ansa1t*ons@ 17e10 t7at t7e o1entat*on (4,17ase o,e, 2

4,17ase at7o,*at*on 2 *n9o*1e 2 el*9e,6 ,e1e*4t 2 an6 ,e1e*9*n- o1entat*on 2 4a6ent) *s 1ons*stent *n ant*t6@ 4,*1*n-@ 4,o1t es1,*4t*on (4a,t*1la,l617e10*n- fo, sbst*tt*on of lo=e, al*t62-,ae 4,o1t)

• C7e10 =7et7e, t7e *n*9*al *tes a 4 to t7e total -*9en on t7e 9o17e, 2

4,17ase o,e, an t7e a44,o4,*ate aonts of *n1oe ta8 an sales ta8 7a9e beena11onte fo, an =*t77el a11o,*n-l6

• Follo= 4 on an6 s7o,t?fall 2 sbst*tt*on 2 *ss*n- *tes 2 lt*4le el*9e,*es to

ens,e t7at ostl6 =7at =as ,e1e*9e =as 4a* fo,

• C7e10 =7et7e, t7e 4e,son(s) ,es4ons*ble fo, t7e 4,17as*n- fn1t*on(s) ,e1e*9e(s)

t*el6 ,e4o,ts f,o t7e Gene,al Le-e, ne, t7e ,ele9ant Obe1t Coes an t7att7e *nfo,at*on *s 4,esente *n a =a6 t7at *t 1an be se b6 t7e ,es4ons*bleana-e,s se1t*on.

• C7e10 =7et7e, t7e 4e,son(s) ,e1on1*le t7e *nfo,at*on *n t7e a11ont*n- ,e4o,t

=*t7 t7e 4,17ases fo, t7e 4e,*o ,e4o,te.

• Ens,e t7at L+O (Lo1al +,17ase O,e,) *s ,a*se *n t7e nae of t7e sele1te

s44l*e, base on Co4a,at*9e Stateent CST

• S44l*e,s b*ll2 *n9o*1e *n t7e 4,es1,*be fo,at l6 s*-ne b6 t7e Cont,a1to,2

S44l*e,. S44l*e,s B*ll eta*ls at17es =*t7 t7e L+O@ t7e B*ll *s sta4e at t7e,e1e*9*n- n*t

• 7e,e 4,17ase *s not ae b6 t7e 1ent,al sto,e2 4,o1,*n- n*t@ ens,e t7at Not

A9a*lable 1e,t*f*1ate *s obta*ne f,o *t

• C7e10 t7at 1on9o6 note(*n 1ase of H*,*n- of


64/146

4a,ts t7at s7ol 7a9e been 1o9e,e b6 =a,,ant*es

• C7e10 *n 1ase of late el*9e,6@ =7et7e, an6 4enalt*es a44l6 ne, 1ont,a1t an *f

so@ =7et7e, 4a6ent =as aste a11o,*n-l6

• C7e10 fo, an6 4l*1ate 4a6ents (see a44l*1at*on of CAAT 2 anal6t*1al ,e9*e=

ne, Anal6t*1al Re9*e= a1t*9*t6)

• C7e10 t7e,e 7as been 4,o4e, at7o,*t6 to ente, *nto t7e a1*s*t*on 4,o1ess@ ant7at t7e s*e of t7e 4,17ase *s =*t7*n t7e f*nan1*al 4o=e,s of t7e at7o,**n-off*1e,

• C7e10 fo, s44o,t*n- ate,*al to st*f6 t7e a1*s*t*on of t7e -oos an se,9*1es@

*ent*f*e *n b-et

• C7e10 t7at 4,17ase 4a6ents a,e 1o,,e1tl6 *ent*f*e *n t7e Gene,al Le-e, ne,

t7e 1o,,e1t Obe1t an 1o,,e1tl6 1oe a11o,*n- to t7e C7a,t of A11ontsClass*f*1at*on Coe Boo0 b6 17e10*n- fo, t7e sa4le of t,ansa1t*ons t7at t7e 4a6ents 7a9e been 1o,,e1tl6 1oe a11o,*n- to t7e C7a,t of A11onts 1oes.

• C7e10 t7at t7e s44l6 7as been ae =*t7*n t7e el*9e,6 ate ent*one on t7e

Lo1al 4,17ase o,e,@ so t7at no L**ate Daa-es 17a,-es a,e a44l*1able

• C7e10 t7at 1ont*n-ent b*ll l6 ,a*se b6 t7e ,es4e1t*9e Coan*n- Off*1e, an

*s *n l*ne =*t7 t7e s44l*e,s b*ll

• Cont,a1t nbe, s7ol be ent*one on t7e 1ont*n-ent b*ll@ =7e,e a44l*1able.

• C7e10e ,ates of In1oe Ta8 an Sales Ta8 an ens,e 4,o4e, =*t77ol*n- :

e4os*t *n Go9e,nent t,eas,6

• C7e10 t7at b*ll sb*tte fo, 4a6ent *s fo, t7e 1,,ent 4e,*o an *s not 4a*

befo,e

• C7e10 t7at 17ee *s s*-ne b6 es*-nate off*1e,

6.23 A,+ P77 W80 (M,/,+9E*,*,* S:,'0)


Date"'# Conducted:

Audit procedureDone

*

P

Re!

MES rignal or':

58


65/146

• C7e10 a44,o9al of 1o4etent en-*nee, at7o,*t6 on +,oe1t

Est*ate (E8e1t*9e En-*nee,*n- *n?C7*ef2D*,e1to, o,0s : C7*ef En-*nee, 2Cont,olle,


66/146

Cont,a1t A-,eeent an t7e aont ent*one *n t7eRAR(Rnn*n- A11ont Re1e*4t)

• C7e10 t7at 1as7 ,e-*ste, *s 4,o4e,l6 4,e4a,e@ ,e1on1*le an

a44,o9e

• C7e10 t7e ,e1o,*n- of t,ansa1t*on *n t7e ,ele9ant 7ea of a11ont

• C7e10 t7at +n17*n- e* *s 4,e4a,e b6 Un*t A11ontant anat17e =*t7 t7e RAR Rnn*n- A11ont Re1e*4t).

• C7e10 Schedule 777 4,e4a,e b6 Un*t A11ontant an at17

eta*ls of 4a6ent =*t7 t7e Rnn*n- A11ont Re1e*4t (RAR).

• C7e10 4,o4e, e8a*nat*on of s*te 4lan 2 a42 ,a=*n-.

• C7e10 t7at 1o4let*on 1e,t*f*1ate *s l6 s*-ne b6 1on1e,ne

4a,t*es.

• +,oe1ts est*ates s7ol be 4,o4e,l6 e8a*ne.

• E8a*ne ate,*al at s*te (


67/146

not ,a=n24a* t=*1e.

• C7e10 *n 1ase of 1ont,a1t not 1o4lete =*t7*n t7e a-,ee 4e,*o@

st*4late 4enalt6@ *.e. L**ate Daa-e *s *4ose

• C7e10 t7at Rnn*n- A11ont Re1e*4t (RAR) *s 4,e4a,e an

s*-ne b6 t7e Ga,,*son En-*nee, as 4e, =o,0 one.

• C7e10 t7at s4e1*f*e 1ont,a1t nbe, *s ent*one on b*ll.•


68/146

• C7e10 t7at ont7 en 1as7 balan1es l6 1e,t*f*e b6 t7e Ga,,*son

En-*nee, a,e 1onte an 1o,,e1t.

• Ens,e =7et7e, t7e,e a,e 1lea, 4,o1e,es fo, a*nta*n*n- *4,est

1as7 an a0*n- 4a6ents *n 1as7 t7at e81ee 4,es1,*be l**ts.

• C7e10 t7at 1o,,e1t*9e ent,6 *s ae *n t7e 1as7 boo0 fo, all

1an1elle 17ees.• C7e10 t7at ent,6 *s ae *n t7e 1o,,e1t a11ont*n- 4e,*o *n t7e

1as7 boo0.

0.#* Auit Pro$r+e +sh i" H+":+"2


Date"'# Conducted:

62


69/146

Audit Progra$$e Done/*.

P

Re!.

• Obta*n a l*st of ban0 a11onts an t7e*, lo1at*ons.

• Obta*n a s17ele of 1as7@ s7o=*n- all 1as7?*n?ban0 an 1as7?*n?7an

• A-,ee all aonts to t7e 1as7 boo0.• Obta*n ban0 stateent fo, t7e 4e,*o *e*atel6 afte, t7e 1los*n- of

f*nan1*al 6ea, to ete,*ne =7et7e, ,e1e*4ts o, *sb,seents a,e ,e1o,eon a t*el6 bas*s

• F,o t7e ban0 stateent *e*atel6 afte, 6ea, en/

a) C7e10 t7at all 17ees 1onta*ne t7e,e*n to see *f t7e,e a,e an6 ot of ne,*1al seen1e *n 1o4a,*son =*t7 17ees 1,,entl6 be*n- se

b) Note an *n9est*-ate an6 17ees =7*17 a44ea, to be ot of seen1e1) Clea, all t7e otstan*n- 17ees to t7e ban0 stateents an *n9est*-ate

an6 n?1lea,e 17ees) In9est*-ate otstan*n- 17ees of ate,*al aont =7*17 o not a44ea,

on t7e ban0 stateent• Sen ban0 1onf*,at*on lette, to ban0 fo, 9e,*f*1at*on of 1los*n- balan1e.

• Re1on1*le t7e balan1e *n t7e 1as7 boo0 =*t7 ban0 1onf*,at*on lette,.

• A,,an-e 476s*1al 1ont o, obta*n 1e,t*f*1ate of 1as7?*n?7an of *4,est

a11onts an n?e4os*te 1as7 ,e1e*4ts.

• E8a*ne t7e 1as7 boo0 befo,e an afte, t7e 4e,*o en ate fo, *tes t7at

*-7t not be *n1le *n t7e 1o,,e1t 4e,*os.

• C7e10 t7e ent*t6s ban0 ,e1on1*l*at*on 4,o1e,es an ens,e t7at t7e6 a,e

1on1te ,e-la,l6 an t7at t7e latest *s 1ons*stent =*t7 a*t ,e1on1*l*at*on,eslts.

•C7e10 o4en*n- balan1e t7*s 6ea, =*t7 1los*n- balan1e last 6ea,.

• F,o 6ea, en ban0 ,e1on1*l*at*on stateents (fo, ea17 ban0 a11ont? as

o4e,ate b6 se4a,ate 1as7 boo0)/

a) Ve,*f6 a11,a16 of t7e ban0 ,e1on1*l*at*on b) E8a*ne a44,o9al of ,e1on1*l*at*on1) A-,ee balan1es 4e, ban0 ,e1on1*l*at*on to t7e f*nan1*al stateents2

annal a11onts) In9est*-ate an6 nsal astents s7o=n

• C7e10 to ens,e no ban0 a11onts a*nta*ne 1ont,a,6 to 4ol*16/

• Ens,e t7at n*ts o not 7a9e se4a,ate ban0 a11onts

• Fo, Cantt. boa,s@ ens,e t7at a11onts a,e ostl6 a*nta*ne *n -o9t.

t,eas,6 *.e. State Ban0 o, Nat*onal ban0

• Fo, Cantt. boa,s@ ens,e t7at t7e 1ont,ols as s4e1*f*e *n t7e A11ont*n-

+ol*1*es an +,o1e,es


70/146

an ,e1e*4ts1) All ,e1e*4t 9o17e,s seent*all6 nbe,e) At7o,*e 4e,son 9e,*f6 an at17 t7e ban0 s1,oll =*t7 t7e 4a6ent

a9*1e note on a a*l6 bas*s

• Fo, Cantt. boa,s@ t,a1e e4os*ts *n t,ans*t at t7e en of t7e 4e,*o to ens,e

t7e6 7a9e been ,e1o,e *n t7e 4,o4e, 4e,*o• C7e10 t7at t7e 1as7 f*-,es a,e 1o,,e1tl6 1oe *n t7e -ene,al le-e,

•


71/146


Date"'# Conducted:

Audit procedureDone

*

P

Re!

A. 5u$p Su$ Contract% Pro+i'ional 5u$p Su$ "P.5.S#

C7e10 t7at /

• It *s a44,o9e b6 t7e Co4etent F*nan1*al At7o,*t6 (.*.e.

F*nan1*al A9*so,)

• Cont,a1t *s 1on1le =*t7*n 9al* 4e,*o of san1t*on.

• Cont,a1t *s ,est,*1te to t7e aont of A*n a44,o9al.

• If 1ont,a1t *s be6on t7e a*n a44,o9al as =ell as $!

4e,*ss*ble l**t t7en 17e10 ,e9*se 4,oe1t est*ates *s 4,e4a,e an ,e9*se a*n a44,o9al *s obta*ne.

•


72/146

e1te f,o 1ont,a1to,s b*ll ,*n- f*nal 4a6ent.

Mea'ure$ent Contract:8

In a*t*on to all 17e10s as 4,o4ose fo, a*t of s 1ont,a1t@ t7e

follo=*n- 17e10s s7ol be e8e,1*seC7e10 t7at

• All t7e abst,a1t of ant*t*es *tes s7ol be 17e10e an

1o4a,e =*t7 ,e-a, to t7e*, ant*t*es an nbe,s =*t7


73/146

• T7at t7e sto,e s44l*e t7,o-7 1ont,a1t *s ,est,*1te to t7e

oneta,6 9ale of t7e Cont,a1t A-,eeent.

• T7at In1oe Ta8 7as been e1te f,o 1ont,a1to,.

• T7at t7e 1ont,a1t 4e,1enta-e allo=e to 1ont,a1to, *s st*f*e.

67


74/146

0.#0 Auit Pro$r+e L+" :ui!i"$ CMi!it+r) Est+teO5%e


Date"'# Conducted:

Audit procedure Done

*

P

Re!

Co$pletene'':

• Gene,al Lan Re-*ste, (GLR) *n ,es4e1t of all Defen1e lans *s

4,o4e,l6 a*nta*ne *n t7e 4,es1,*be fo,at.

• C7e10 t7at Class A?I lan@ 4la1e ne, t7e a*n*st,at*9e 1ont,ol of

Defen1e fo,1es *s be*n- se fo, at7o,*e *l*ta,6 4,4ose asef*ne *n Rle " of Cantonent Lan A*n*st,at*on Rles?$%3@an *ts *sse *f an6 7as been ,e4o,te to


75/146

t7e s*te =as 4t to o4en a1t*on an lease ot to t7e 4e,sons offe,*n-7*-7est aont as 4,e*.

• Ens,e afte, e84*,6 of 4,es1,*be lease 4e,*o@ t7e lan 7as been

,ese *e*atel6 fo, f,t7e, *s4osal.

• C7e10 t7at an6 lan =as e1la,e s,4ls to


76/146

0.#3 Auit Pro$r+e P+2 Ar) U"itsFor+tio"s


Date"'# Conducted:

Audit procedure Done

*

P

Re!

C7e10 t7at/F7;


77/146

• Rat*on ,a=n f,o BSD2SSD *s not *n e81ess of at7o,*at*on of Un*t

st,en-t7

• It s7ol be l*n0e =*t7 Da*l6 +a,ae Stateent U.R.C. an +a,t?I

o,e,s.

P5:• +OL *s at7o,*e fo, t7e s4e1*f*1 4,4oses21ate-o,*es.

• +OL 1annot be t,ansfe,,e f,o one 1ate-o,6 to anot7e, 1ate-o,6.

• +OL t,ansfe,,e to ot7e, n*ts t7,o-7 9o17e,s bt +OL 1ons4t*on

,e4o,t sent to 7*-7e, at7o,*t*es oes not s7o=s t7e abo9e t,ansfe,.

•


78/146

• Annal Sto10 Ta0*n- *s 1a,,*e ot ,e-la,l6 an *s1,e4an162loss

4o*nte ot o, not.

• T7e,e *s no o9e,sto10*n- of sto,e.

• Sto,e ,e1e*9e bt not ta0en on le-e, 17a,-es.

A55ANCES:• +a6 b*lls a,e 1o4lete *n all ,es4e1t l6 s44o,te =*t7 ,ele9ant

o,e,s.

• +a6 B*ll 4,e4a,e a11o,*n- to at7o,*e establ*s7ent.

• Cal1lat*on an ,ates of +a6 : Allo=an1es 1la*e a,e 1o,,e1t an

a11o,*n- to a*ss*b*l*t6.

• F*8at*on of 4a6 *s a11o,*n- to ,le.

• A9an1es *f 4a* an be*n- ,e1o9e,e ,e-la,l6 : a11o,*n- to t7e

,ate of ,e1o9e,6.

• A,,ea,s b*lls st be 17e10e =*t7 ,ele9ant ,e1o, to 9e,*f6 t7e 1la*.

• T7e 4a6ent of t7ose ,e1,*te o9e, an abo9e t7e at7o,*est,en-t7.

• T7e 4a6ent of t7ose atta17e =*t7 1*9*l Go9t.

• All t7e 4a,t*1la,s of t7e *n*9*als a,e 1o,,e1t an 7a9e been atteste

b6 t7e ,es4ons*ble off*1e,.

• nder Para81 "o# of 4a6 an allo=an1e ,e-lat*ons Vole I

?$"@Inst,1to,s 4a6 =*ll not be a*ss*ble *n a*t*on to1oan 2 staff 17a,-e 4a6.

• C7e10 ,*n- e9alat*on of 4a6 an allo=an1es@ under para B 23 "a#

of +a6 an Allo=an1e Re-lat*on Vole?I $"@ ;al*f*1at*on 4a6=*ll not be a*ss*ble fo, an6 al*f*1at*on =7*17 *s t7e bas*1*n* ,e*,eent fo, ent,6 as a 1o*ss*one off*1e, *nto t7ea, o, se,9*1e 1on1e,ne.

• C7e10 ,*n- e9alat*on of 4a6 an allo=an1es@ ne, Para 4 "# of

+a6 an Allo=an1e Re-lat*ons Vol?II $@ *f bot7 7sban an=*fe be*n- Go9e,nent se,9ant a,e ,es**n- to-et7e, at t7e saestat*on *n Go9e,nent ,es**n- allotte to one of t7e@ 7ose ,ents7all be a*ss*ble to t7e ot7e,.

• C7e10 ,*n- e9alat*on of 4a6 an allo=an1es@ ne, +a,a K $& (a) of

A,6 lea9e ,les 4a,t I (Rles)@ Lea9e e8?+a0*stan =*ll not be-,ante e81e4t =*t7 t7e 4,*o, a44,o9al of COAS (C7*ef of A,6

Staff). He a6 el*1ate 7*s 4o=e, *n t7*s ,es4e1t to t7e DG+S?GH;.

E(; 6 A(;:

• Re1e*4t : e84en*t,e of t7e -,ant *s l6 a11onte fo, : s44o,te

=*t7 9o17e,s.

• Sale 4,o1ees of s,4ls2obsolete : ate,*al a,e 1,e*te to t7e fns.

• Un?se balan1e of E1at*onal T,a*n*n- G,ant *s to be ,efne to

Go9t. at t7e 1lose of f*nan1*al 6ea,.

72


79/146

• S4e1*al Annal T,a*n*n- G,ant ATG 1an onl6 be se fo, t7e s4e1*f*1

=o,0 fo, =7*17 *t *s -,ante.

• C7e10 t7at lo1al 4,17ase =as ae =*t7ot ta0*n- t7e sto,e on le-e,

17a,-e.

• C7e10 t7at aont of s4e1*al Annal T,a*n*n- G,ant ATG *s be*n-

-,ante to t7e n*t 2 fo,at*on to 4,oote t7e t,a*n*n- fa1*l*tates bt-ene,all6 obse,9e t7at t7*s -,ant *s often *ss?se an no ,able*te a,e 4,17ase.

• C7e10 t7at@ *f 1ostl6 *tes2s4a,e 4a,ts a,e 4,17ase on t7e ean

bases b6 t7e =o,0s7o4s a-a*nst t7e 9e7*1les fo, =7*17 t7e 4,17ase *sae bt t7e 4,17ase s4a,e 4a,ts a,e se fo, ot7e, 9e7*1les ansoet*e of t7ese 4a,ts a,e l6*n- fo, a 9e,6 lon- t*e =*t7ot an6 se.

• Ens,e A.T.G Annal T,a*n*n- G,ant 1ons*sts of follo=*n- t64es.

(*) F*8e ATG.(**) F*el A.T.G.(***) S4e1*al A.T.G. T7e eta*le Rles a,e -*9en F.R. Part877 andA.(.;. Pa$phlet.

• nder Para =4 "e# > o! Financial Regulation ?ol. 77 13@@ t7e

ne84e1te 4o,t*on of an6 e8*st*n- -,ant s7all la4s on %!t7 >ne of ea17 6ea,. T7e sae st ens,e ,*n- e9alat*on of 1as7 boo024a6ent 9o17e,.

/ASE SPP5 DEP'%SSD' "PRC


80/146

9o17e, of all ss e81ee*n- Rs. '! s7ol be sta4e@ =*t7 ,e9enesta4 of a44,o4,*ate 9ale as 4,es1,*be f,o t*e to t*e. T7e saest ens,e ,*n- e9alat*on of 4e,anent 9o17e,s2b*lls.

• nder Para "# o! Financial Regulation ?ol87813@ @=*t7 t7e

e81e4t*on of lo1al 4a6ent@ all 4a6ent s7ol be ae b6 a 17ee.

CEN(RA5 RD7NANCE DEP(':

• C7e10 t7at ,e1e*4t@ 7ol*n- : *sse of sto,e a,e be*n- 0e4t ,e-la,l6

*.e. a6 to a6 a11ont fo, all sto,e t,ansa1t*ons.

• Inents a,e s*-ne b6 a 4,o4e, at7o,*t6 : a,e *n o,e,.

• Costl6 sto,es a,e a

Defence Audit Guidelines_Final 25 March 2010

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Transcript of Defence Audit Guidelines_Final 25 March 2010